House Ways and Means’ (HWM) proposed budget follows a similar approach to the governor’s proposal, bracing for difficult times ahead while making ample use of the Fair Share surtax.
The House Ways and Means (HWM) committee’s Fiscal Year (FY) 2027 budget proposal, released on April 15, allocates approximately $63 billion in spending for the Commonwealth. This proposal includes $2.7 billion from the Fair Share surtax, the voter-approved ballot initiative that enacted a surtax on the highest-income earners in Massachusetts. This is the next step in the FY 2027 state budget cycle, after Governor Maura Healey released her FY 2027 budget proposal in late January. The HWM proposed budget follows a similar approach to the governor’s proposal, bracing for difficult times ahead while making ample use of the Fair Share surtax.
MassBudget will also conduct an in-depth analysis of the proposed FY 2027 budget approved by the full House of Representatives, which is slated to happen in late-April to early-May.
The sections of this preliminary analyis reflect the areas where MassBudget is paying particular attention to and reflect the priorities of our grassroots and coalition partners.
Jump to any of the following sections: Fair Share Surtax, Department of Transitional Assistance; Volunteer Income Tax Assistance; Declining Multilingual Learner Enrollment in K-12; Early Education and Care; Housing; Transportation; and Additional Areas of Note.
Fair Share Surtax
Fair Share surtax revenue continues to enable the state to invest in critical education and transportation programs.
The HWM committee proposes using surtax revenue in FY 2027 to:
- Fully fund the sixth and final year of the Student Opportunity Act (line item 1596-2450), legislation that has made K-12 education funding more equitable by increasing funding, especially in districts with multilingual learners and students from families with low incomes.
- Provide funding to increase per-pupil minimum aid (1596-2438) from $150 to $160. The additional funding from the Fair Share surtax will help school districts in FY 2027 by allocating an additional $52.2 million in Chapter 70 aid. This ensures districts that would otherwise see reductions in their Chapter 70 aid will instead have an increase.
- Fully fund free school meals (1596-2422) for every child in public schools, regardless of their household income. This is of particular importance at a time when the federal Supplemental Nutrition Assistance Program (SNAP) eligibility criteria has changed, affecting over 1.1 million Massachusetts residents.
- Fully fund free community college (1596-2700), making higher education more affordable for all Commonwealth residents and making a crucial investment in workforce development.
- Provide funding for transportation systems, like the MBTA (1595-6369), Regional Transit Authorities (1595-6370), and the roadways.
Department of Transitional Assistance
The HWM proposal only allocates $122 million in funding for Department of Transition Assistance (DTA) caseworkers (4400-1100). This is $26 million less than the governor’s FY 2027 budget proposal for DTA caseworkers. It would be a nearly $21 million cut from expected FY 2026 funding.1 According to an analysis performed by the Massachusetts Law Reform Institute (MLRI), the HWM’s proposed funding would risk approximately 150 caseworkers being laid off. These caseworkers help administer programs like the Supplemental Nutrition Assistance Program (SNAP), Health Incentive Program (HIP), and employment and training – all serving families and individuals with low incomes. Providing adequate funding to ensure DTA staffing is keeping up with increased need is critical for families to receive much-needed food assistance benefits. It is also crucial for maintaining essential federal funding for years to come in light of new eligibility barriers to SNAP and other human service programs included in recent federal legislation. Instead of cutting, the state should be increasing this funding and adding even more DTA caseworkers.
Volunteer Income Tax Assistance
The HWM budget proposal restores funding for the Volunteer Income Tax Assistance (VITA) sites (1201-0100) to $1.5 million. The program has experienced significant cuts every year since FY 2023. More than 80 VITA sites across the Commonwealth serve over 30,000 taxpayers with low incomes. VITA assists these taxpayers by helping them access free tax preparation, claim refundable tax credits, and connect to other services like the Women, Infants, and Children (WIC) food program and Head Start. These sites are also crucial to ensure the maximum impact of the Child and Family Tax Credit, the expanded Earned Income Tax Credit, and the Senior Circuit Breaker. This funding is even more vital in light of federal cuts to tax assistance.
Declining Multilingual Learner Enrollment in K-12
The HWM budget proposal establishes a $10 million reserve fund (1599-0008) to address declining enrollment of multilingual learners in school districts across the Commonwealth, which has led to losses in funding for districts. This is an important recognition that more needs to be done to support districts experiencing this challenge. However, this funding level fails to adequately address the widespread and significant enrollment losses from FY 2026 to FY 2027. Many of these districts have seen notable declines in multilingual learners2, leaving communities facing continued fiscal strain. Recent reporting has highlighted growing concern within communities about immigration enforcement activity, including the presence of Immigration and Customs Enforcement (ICE) agents in Massachusetts. These concerns may make some families hesitant to engage with public institutions, including schools.
Early Education and Care3
The HWM has proposed $475 million in funding for Commonwealth Cares for Children (C3, 3000-1045 and 1596-2410) operational grants, the same as in FY 2026. This amount is enough to maintain current grant levels for programs already receiving the grant. However, it is insufficient to provide new grants to the 600 programs that are not currently receiving C3 funding. The C3 program has been instrumental in increasing educator wages and educator retention, and maintaining the availability of child care seats. Without these grants, programs are at a greater risk of closing their doors, hurting educators and families alike.
The House also included $31.2 million to address the income-eligible waitlist in their FY 2026 supplemental budget proposal. Total proposed funding for Child Care Financial Assistance (CCFA), including the FY 2026 supplemental proposal and FY 2027 HWM proposal, would continue to serve the number of children currently receiving child care subsidies. This would allow nearly 2,000 children currently on the CCFA waitlist to get access to affordable child care. As of March 2026, there are 32,000 children on the CCFA waitlist.
The HWM proposed budget fails to fund provider reimbursement rate increases. The Department of Early Education and Care (EEC) reimburses providers who serve children using state subsidies to access child care. These reimbursements can make up a significant portion of a provider’s overall revenue, especially if most or all of their children are utilizing subsidies. Reimbursement rate increases allow providers to keep up with the impacts of inflation and continue delivering high-quality child care year over year. According to SEIU Local 509, the labor union representing Family Child Care (FCC) educators in Massachusetts, current reimbursement rates are so low that many educators are worried about going out of business if they do not receive an increase soon.
Housing
The Massachusetts Rental Voucher Program (MVRP, 7004-9024), the state’s primary rental voucher program, receives $281.3 million in the HWM FY 2027 budget proposal. This is an increase from FY 2026 of approximately $28 million. This would allow the program to add new vouchers, helping households experiencing housing instability or homelessness access affordable housing. HomeBASE (7004-0108), the state’s primary tool for transitioning families from Emergency Assistance (EA) shelters to stable housing, as well as providing housing support to families who would otherwise seek assistance through an EA shelter4, would receive $82.3 million, a $25 million increase over FY 2026. While this would be an increase in funding, it falls short of the $97 million in total funding HomeBASE has required in FY 2026 to provide adequate services to people experiencing housing insecurity or homelessness. Due to lack of appropriate funding in FY 2026, additional funds were transferred into HomeBASE during the current fiscal year (FY 2026). Residential Assistance for Families in Transition (RAFT, 7004-9316) program, which assists households with housing costs when they are facing eviction, foreclosure, loss of utilities, and other housing emergencies, would receive a slight increase from $207.5 million to $210 million.
Transportation
Transportation spending is provided both by the annual budget process and by the still-pending FY 2026 Fair Share supplemental bill, in which the House proposed directing $834 million in surplus Fair Share surtax funds to transportation. The HWM FY 2027 budget proposes $975 million in Fair Share surtax funds for transportation through the Commonwealth Transportation Fund (CTF), which provides operating support and financing for capital projects through several state transportation agencies and programs. Mixing other CTF funds and Fair Share surtax funding, the HWM proposes $605 million for an operating transfer to the Department of Transportation, $470 million for the MBTA, and $217.5 million for the Commonwealth’s 15 regional transit authorities (RTAs).
The HWM FY 2027 proposal does not include line-item language designating RTA spending between spending areas. One area of particular concern is a grant program supporting fare-free travel for which the governor had proposed $35 million. Fare-free regional transit has been a highly successful program that has encouraged a sharp increase in ridership, which reversed long-term declines. It is a well-targeted affordability program because regional transit riders tend to have low incomes and often cannot afford other options to get to work, show up to medical appointments, or other travel. Fare-free transit also has major operational benefits – making travel more efficient by enabling riders to board quicker and dispensing with additional tasks of fare enforcement, money tracking, and security.
Additional Areas of Note
Opting Out of Federal Corporate Tax Changes
The HWM FY 2027 budget proposal assumes some revenue will be retained by the House’s FY 2026 supplemental budget proposal to temporarily delay several inequitable federal corporate tax changes enacted as part of last year’s “One Big Beautiful Bill” tax law. In their supplemental budget bills, lawmakers seem to have coalesced around delaying rather than fully opting out from bringing the most costly federal corporate tax cuts into the state tax system. This unfortunate decision does not prepare the Commonwealth for uncertainties ahead because it will cost hundreds of millions of dollars in lost revenue in future years. With an eye to the future, the House’s FY 2026 supplemental proposal would fully opt-out of these federal tax cuts if a currently proposed ballot initiative to reduce the state’s income tax became law. This initiative would have a major detrimental impact on the state budget, reducing annual state revenue by $5 billion once fully phased in. The HWM FY 2027 budget proposal could have also taken additional steps to prepare for future headwinds by including other significant revenue raising policy proposals like taxing more of the profits multinational corporations shift to off-shore tax havens.
Federal Impacts of Note
Fiscal changes from the federal government have already affected Massachusetts residents. Premiums for health care plans available via the Affordable Care Act have increased sharply after the expiration of enhanced premium tax credits on December 31, 2025. The federal government’s failure to extend these tax credits have made health care unaffordable for many Massachusetts residents. Looming federal cuts and harsh new eligibility requirements to critical food assistance programs, such as the Supplemental Nutrition Assistance Program (SNAP), the Women, Infant, and Children nutrition program (WIC), and Medicaid will be felt in Massachusetts for years to come.
Capital Gains
Like the governor’s FY 2027 budget proposal, the HWM budget proposes raising the capital gains budget threshold to $2.25 billion, meaning that $470 million more in revenue would be available for FY 2027 budgetary appropriation from the General Fund. The expected above-threshold capital gains total, based on the FY 2027 Consensus Revenue Estimate, thus would become $256 million under both the governor’s and the HWM proposals. As the governor did, the HWM budget proposal also changes the distribution of how above-threshold capital gains tax revenue would be distributed among different funds (Outside Section 64). Current law dictates that 90 percent of the above-threshold capital gains revenue is transferred to the Commonwealth Stabilization Fund, and 5 percent each to the State Retiree Benefits Trust Fund and the Pension Liability Fund. Under the HWM FY 2027 proposal, 20 percent would go to the Commonwealth Stabilization Fund, 65 percent to the State Retiree Benefits Trust Fund, and 15 percent to the Commonwealth’s Pension Liability Fund. Based on the changes laid out in the HWM budget’s outside sections (described above), the HWM budget proposal thus would deposit $51 million into the Stabilization Fund, or $49 million less than the governor’s proposed deposit of $100 million.
Emergency Aid to Elderly, Disabled, and Children (EAEDC) Program
The HWM does not include the governor’s proposal to impose a $2,000 asset5 limit for access to the Emergency Aid to Elderly, Disabled, and Children (EAEDC) program. This program provides cash support for basic needs to older adults, people with disabilities, children being cared for by a non or distant relative, and adults taking care of a person with disabilities.6 Establishing such a low asset limit in the eligibility criteria would restrict access for people who critically need this program and discourage people from saving, and potentially transitioning out of poverty. Additionally, enacting asset limits could lead to eligible people to not have access because documenting they are below the asset limit creates another barrier.
Looking Forward
The next step in the FY 2027 budget cycle will be the full House of Representatives proposing and debating amendments to the HWM budget proposal over the next few weeks before passing a final proposed version. MassBudget will conduct an in-depth analysis of the proposed FY 2027 budget approved by the full House of Representatives. Afterwards, the Senate Ways and Means (SWM) committee – and then the full Senate – will follow the same progression for their proposed FY 2027 budget, starting in early May. MassBudget will conduct a preliminary analysis of the SWM proposed budget and then an in-depth analysis of the proposed budget approved by the full Senate.
Massachusetts lawmakers continue to draft a state budget within a volatile and unpredictable state and federal budget environment. From proposed ballot initiatives that significantly hinder the state’s ability to raise revenue to looming federal budget cuts, lawmakers need to consider other ways to grow the budget to adequately fund much-needed programs across the state. Lawmakers continue to have the opportunity to demonstrate that they can create a Commonwealth where everyone, independently of their race, nationality, and socioeconomic background, can thrive.
Endnotes
1 There is $41.6 million in additional funding pending the passage of a FY 2026 supplemental budget that would bring FY 2026 funding total to $142.8 million.
2 Multilingual learners are not synonymous with immigrants without status. However, multilingual learner status is the closest proxy available in publicly reported education data for tracking trends that may affect immigrant communities.
3 The Commonwealth Cares for Children program is partially funded by Fair Share revenue. Funding to address the income-eligible waitlist is funded by Fair Share revenue.
4 Families living in non-EA domestic violence shelters and residential use treatment programs may also be eligible for HomeBASE.
5Assets could include cash, vehicles, property, and retirement accounts
6 EAEDC approval also means automatic enrollment in MassHealth.
