This analysis represents the next step in the FY 2027 state budget creation process.
Both the Massachusetts House of Representatives and Senate have put forward their respective budget proposals for the Fiscal Year (FY) 2027 that starts July 1. The Conference Committee, consisting of six members, three from the House of Representatives and three from the Senate, will work to reconcile the differences between the House’s (HB5501) $63.4 billion and the Senate’s (SB3100) $63.4 billion budget proposals. These proposals include $2.7 billion in revenue from the Fair Share surtax, the voter-approved ballot initiative that enacted a surtax on the highest incomes in Massachusetts.1 While the two budget proposals have more or less the same expenditure totals, much remains at stake.
In this analysis, we examine differences between the House and the Senate’s proposals in specific policy areas. We also provide recommendations on what the Conference Committee should include in the FY 2027 budget in education, childcare, housing, and other human service programs.
Throughout this analysis, the bolded sections in the charts represent the funding proposal MassBudget recommends the Conference Committee adopt.
The Massachusetts Budget and Policy Center (MassBudget) will conduct a preliminary analysis of the Conference Committee’s proposed budget.
This analysis covers the following topics (click on one to be taken to that section): Regional Transit Authorities, K-12 Education, Early Education, VITA Tax Assistance, Department of Transitional Assistance, Learnfare Policy, Housing, and Gambling Funds.
Regional Transit Authorities (RTAs) can Continue Fare-Free Buses
| House FY 2027 | Senate FY 2027 |
|---|---|
| Proposal does not include line-item language designating RTA spending between spending areas. | Proposes $40 million for fare-free year-round RTA service. |
Fare-free transit at the Regional Transit Authorities (1595-6370) is an important achievement consistently made possible through funding from the Fair Share surtax. Bus fares are regressive forms of state revenue. Public bus riders tend to be people with lower incomes with no other means to get to places than public transportation, and bus fares represent a disproportionately larger share of their incomes. Fare-free transit has led to dramatic increases in ridership. For example, free fares in the Southeastern Regional Transit Authority contributed to ridership growth 13 to 14 times faster compared to two neighboring transit agencies that charged fares.
Funding for K-12 Schools to Address Declining Enrollment of English Learners
| House FY 2027 | Senate FY 2027 |
|---|---|
| Proposes $10 million in funding for K-12 schools towards addressing declining enrollment | No funding proposed for declining enrollment |
The House’s budget proposal establishes a new $10 million reserve fund (1599-0008) to address declining enrollment of multilingual learners in school districts across the Commonwealth. Recent reporting has highlighted growing concern within communities about immigration enforcement activity, including the presence of Immigration and Customs Enforcement (ICE) agents in Massachusetts.2 These concerns may make some families hesitant to engage with public institutions, including schools. This reserve fund will support school districts that have lost funding due to multilingual students enrollment decline. This is an important recognition that more needs to be done to support districts and communities experiencing this challenge. However, this funding level does not adequately address the widespread and significant enrollment losses from FY 2026 to FY 2027.
Investments in School Transportation Reimbursement for Districts
Differences in K-12 Student Transportation Spending Proposals
| Budget | Line Item | Title | Reimbursement Recipients | House | Senate |
|---|---|---|---|---|---|
| FY27 | 1596-2451 | School Transportation | Regional districts; vocational and agricultural transportation | $62,000,000 | $0 |
| FY27 | 7035-0006 | Regional Transportation | Regional school district transportation | $57,162,492 | $114,167,912 |
| FY27 | 7035-0008 | Homeless Student Transportation | McKinney-Vento homeless student transportation | $35,219,466 | $35,219,466 |
| FY27 | 7035-0007 | Voc./Agr. Transportation | Vocational and agricultural transportation | $0 | $1,360,474 |
| FY 2026 Supplemental Budget | 1596-2704 | Regional Transportation | Supplemental regional transportation | $3,000,000 | $0 |
| Total | $157,381,960 | $150,747,852 |
The House and Senate propose similar amounts of funding for K-12 school transportation, but they approach that spending differently. Both chambers fund these programs partially from Fair Share surtax revenue and allocate $35.2 million for homeless student transportation. However, the House proposes $154.4 million for major K-12 transportation reimbursements, compared to $150.7 million in the Senate proposal. The Senate allocates this funding in two accounts – one with $114.2 million dedicated regional transportation and another with $1.4 million for vocational transportation. The House proposal also splits the funding in two accounts, one with $57.2 million for regional transportation and another broader account. This broader account is funded with $62 million which combines regional and vocational transportation reimbursements and allows the Department of Elementary and Secondary Education (DESE) to transfer funds between accounts.
The Conference Committee also proposes an additional $3 million for regional transportation reimbursements in the FY 2026 supplemental budget (see footnote 1). Given the fiscal pressures facing districts across the state, the higher overall funding levels in the House proposal would provide stronger reimbursement support for school districts.
Considering Long Term Policy Solutions for Education and Local Aid
| House FY 2027 | Senate FY 2027 |
|---|---|
| Not included | Proposes Foundation Budget Review Commission |
| Not included | Proposes Commission for the Massachusetts School Building Authority. |
| Not included | Proposes Commission to review the Unrestricted General Government Assistance (UGGA). |
The Senate proposes commissions that could help lay the groundwork for updating three major mechanisms for providing state funds to local communities. These commissions would assess existing policy and funding formulas for programs that provide vital fiscal support for local communities.
- Foundation Budget Review Commission (FBRC) (Outside sections 49 and 82). The Senate proposal would create a new FBRC to examine whether the foundation budget formula accurately reflects the cost of providing an adequate pre-K–12 education across the Commonwealth. The FBRC would recommend updates to the formula and issue a report by October 31, 2028. Its review would incorporate a separate Department of Elementary and Secondary Education (DESE) local contribution study to examine rural school aid, charter school costs, out-of-district special education costs, and transportation costs tied to mileage and geographic size.
- Commission for the Massachusetts School Building Authority (MSBA) (Outside section 83). The Commission would review whether the MSBA has sufficient funding capacity to meet current and future school construction needs, examine the equity of the school building reimbursement formula across communities, and assess whether reimbursement rates and policies align with actual school construction costs and project affordability.
- Commission to review the Unrestricted General Government Assistance (UGGA) (Outside Section 80). The Senate’s proposal acknowledges the existing distribution process is outdated and lacks a formula to update funding distribution as economic conditions evolve. This Commission would provide a first step towards creating a new funding formula for UGGA.
Support Universal Pre-K Expansion
| House FY 2027 | Senate FY 2027 |
|---|---|
| Proposes just $5 million for the Commonwealth Preschool Partnership Initiative (CPPI) | Proposes approximately $23 million for CPPI |
The Senate’s FY 2027 budget proposal includes approximately $23 million (3000-60253) for the Commonwealth Preschool Partnership Initiative (CPPI) while the House proposal includes just $5 million for the same purpose. As MassBudget’s recent research shows, CPPI grants facilitate partnerships between the Department of Early Education and Care (EEC), local school districts, and community-based child care providers to offer low- to no-cost prekindergarten in a community. The Senate proposal would allow EEC to maintain CPPI in the 30 communities where it already exists, and expand to additional cities. With the House funding proposal, EEC would struggle to maintain current programming and would not be able to expand it to other communities in the Commonwealth.
Funding for the Administration of the Office of Early Education and Care
| House FY 2027 | Senate FY 2027 |
|---|---|
| Proposes $12.8 million | Proposes $9.1 million |
The House and Senate proposals differ on their fiscal support for EEC operations. Funding in this line item directly affects EEC’s staffing capacity and the agency’s ability to deliver high-quality programming and support to children, families, and educators. Accounting for earmarks, the House proposes $12.8 million for EEC while the Senate proposes $9.1 million. Both proposals fall short of what was proposed in the governor’s FY 2027 budget (over $13 million).
Funding for Critical Tax Assistance for Filers with Lower Incomes
| House FY 2027 | Senate FY 2027 |
|---|---|
| Proposes to restore funding for Volunteer Income Tax Assistance (VITA) sites (1201-0100) to $1.5 million. | Proposal does not include earmark language designating funding for Volunteer Income Tax Assistance (VITA) sites |
The House 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.
Support for DTA Caseworkers
| House FY 2027 | Senate FY 2027 |
|---|---|
| Proposes $122 million in funding for Department of Transition Assistance (DTA) caseworkers (4400-1100). This would be a nearly $21 million cut from expected FY 2026 funding and risks laying off approximately 150 workers.4 | Proposes nearly $148 million in funding for Department of Transitional Assistance (DTA) caseworkers. The proposed funding would maintain the same number of caseworkers as at the end of 2025. |
Eliminate the Learnfare Policy
| House FY 2027 | Senate FY 2027 |
|---|---|
| Proposal does not repeal the learnfare policy | Proposal repeals the learnfare policy |
Current policy requires children ages 6-16 who receive Transitional Assistance to Families with Dependent Children (cash assistance) to attend school regularly. Children who have too many unexcused absences may lose the child’s portion of the cash assistance grant (referred to as “learnfare”). This is an inequitable and ineffective policy that punishes families experiencing deep poverty, and does not address the issue of chronic absenteeism.
Provide Vital Funding for Critical Housing Programs
| House FY 2027 | Senate FY 2027 |
|---|---|
| Proposes funding Residential Assistance for Families in Transition (RAFT) (7004-9316) at $210.1 million | Proposes to fund RAFT at $201.5 million |
The Residential Assistance for Families in Transition (RAFT, 7004-9316) program helps individuals and families facing eviction, foreclosure, loss of utilities, and other housing emergencies to remain housed. The housing affordability crisis in Massachusetts is such that in FY 2026 RAFT initially received $207.5 in the FY 2026 General Appropriations Act (GAA) and later received $13.8 million more from an FY 2025 supplemental budget that was carried over to FY 2026. This additional funding enabled the Executive Office of Housing and Livable Communities to take steps toward addressing the heightened demand for housing assistance needs. It is worth noting that the funding proposed by both the House and the Senate is still less than the total appropriations for FY 2026. The housing affordability crisis is showing no signs of declining. Therefore, it is imperative for the state to continue investing in programs like RAFT that keep people safely housed and actively participating in the local and state economies.
| House FY 2027 | Senate FY 2027 |
|---|---|
| Proposes the Massachusetts Rental Voucher Program (MRVP) to be funded at $281.3 million | Proposes the Massachusetts Rental Voucher Program (MRVP), to be funded at $278.3 million. |
The Massachusetts Rental Voucher Program (MVRP, 7004-9024) is the state’s primary rental voucher program, providing families with financial assistance to afford the increasing cost of rent. The House’s proposed increase in funding would allow the program to add even more new vouchers, helping households experiencing housing instability or homelessness access affordable housing.
Differences in Distributing Gambling Funds
Tax revenues from casino profits amount to hundreds of millions of dollars each year that support state investments, city and town budgets, and programs for communities. Regularly, throughout the budget process, the formula used to distribute this revenue is adjusted in response to changing needs. Both the House and the Senate propose adjusting the funds’ distribution formula, increasing the 30.1 percent of revenue going to local aid for cities and towns through the Unrestricted General Government Assistance (UGGA). For the large MGM Springfield and Encore casinos, which generated $255 million in state revenue in FY 2025, the House would increase the share to 31.5 percent and the Senate to 35 percent. The Senate’s increased share proposal would eliminate the 2.5 percent share currently dedicated to the Racehorse Development Fund.
The Conference Committee will also have to reconcile proposed changes for the use of revenue from the smaller Plainridge Park casino, which generated $86 million in FY 2025 revenue. The Senate proposes to split the 9 percent Racehorse Development Fund share between UGGA (4.5 percent) and the General Fund (4.5 percent).
For sports betting, both the House and Senate propose to reduce the share of revenue dedicated to the Workforce Investment Trust Fund from 17.5 percent to 10 percent. The House would direct these funds to a new Sports and Entertainment Events Fund, while the Senate would add these funds to a share dedicated to the existing Economic Development Trust Fund.
The outcome of the Conference Committee reconciliation process will determine how much of the gambling industry revenue will be invested, as well as where and how. For an in-depth analysis of how state gambling revenue has been distributed and its equity implications, see MassBudget’s recent report.
Looking Forward
The next step in the FY 2027 budget cycle will have the Conference Committee releasing their FY 2027 budget proposal in the coming weeks. MassBudget will conduct a preliminary analysis of the Conference Committee’s proposed budget and then an in-depth analysis of the General Appropriations Act (GAA).
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 The legislature released an FY 2026 supplemental budget in June 2026 that includes Fair Share surtax revenue because the Fair Share surtax brought in above-estimated revenue collections in FY 2025. As of the end of April 2026, FY 2026 Fair Share surtax revenue collections had already exceeded $3.1 billion, over $700 million above the $2.4 billion budgeted for Fair Share in FY 2026. After the final FY 2026 Fair Share collections are certified at the end of December 2026 (and 15 percent of the overage is directed to the Education and Transportation Stabilization Fund), the remainder will be available for a FY 2027 Fair Share supplemental budget.
2 English Learner students are not synonymous with immigrants or children without status. There are United States-born students who are developing English proficiency, and many immigrant students who are already proficient in English. However, English Learner status is currently the closest proxy available in publicly reported education data for tracking trends that may affect immigrant communities.
3 The total appropriation for $28.45 million, but $5 million would be earmarked for the Summer Step-Up program.
4 According to an analysis performed by the Massachusetts Law Reform Institute (MLRI)
5 FY 2026 GAA funding and additional funding pending in a supplemental budget for FY 2026 would maintain the existing number of caseworkers.
