Press Release: 1/15/2026
MassBudget Statement on the FY 2027 Consensus Revenue Estimate (CRE)
MassBudget statement released on 1/14/26 at 4:30PM
“Today the Governor, Senate President, and Speaker of the House jointly announced the Fiscal Year (FY) 2027 Consensus Revenue Estimate (CRE) which dictates how much money the state has to spend in the upcoming fiscal year. The CRE for FY 2027 has been set at $44.9 billion. This total includes $2.7 billion dollars in surtax revenues from the Fair Share Amendment that can be spent on public education and transportation needs. Last year’s Fair Share revenue far exceeded official projections. It is heartening to see that lawmakers are confident the surtax will continue to build on its success.
“The CRE amount gives the Governor and House and Senate Ways and Means Committees a starting point for building their budget proposals, which will be presented and debated in the coming months.
“The state will have up to $44.9 billion to spend in the FY 2027 budget process on critical needs of the Commonwealth. With the anticipated loss of billion dollars in federal funding due to the Federal administration’s punitive cuts to healthcare, housing, food assistance and other essential human service programs we have challenging choices to make as a state.
The Commonwealth also faces a loss of hundreds of millions of dollars in state corporate tax revenue in FY 2027 (and the current fiscal year) if state lawmakers and the governor do not opt out of the federal corporate tax changes made in the One Big Beautiful Bill Act (OB3).1 While the CRE estimate released today assumes modest revenue growth (which is a good thing), this growth will not be enough to fill the gap that federal funding cuts and state tax revenue losses will create. Today’s news should create even greater urgency among state lawmakers to close corporate tax loopholes and eliminate other costly tax giveaways to corporations and millionaires. Lawmakers will need every available dollar to help keep Massachusetts communities and families afloat during the fiscal storm that is gathering.”
Analysis of Consensus Revenue Estimate (CRE)
Budget watchers are anticipating the loss of billions of dollars in federal funding to the Commonwealth due to the Federal administration’s cuts to healthcare, housing, food assistance and other essential human service programs. The Commonwealth likewise faces the potential loss in revenues of $463 million in FY 2026 and approximately $280 million in FY 2027 if state lawmakers do not act to opt out of the five most costly corporate tax changes included in the federal “One Big Beautiful Bill Act” (OB3).1 While the FY 2027 Consensus Revenue Estimate (CRE), released today, assumes the Commonwealth will see modest revenue growth in the coming fiscal year, that growth will fill very little of the hole created by expected federal funding cuts and state tax revenue losses created by changes to corporate tax law.
The FY 2027 CRE is set at $44.9 billion. Excluding Fair Share, the total is $42.2 billion, which represents expected growth of 2.4 percent over the amount projected to be collected during the current fiscal year (FY 2026). The projected FY 2026 collection total – often referred to as the “benchmark estimate” – stands at $43.614 billion.2 The estimated OB3 related revenue losses (see above) are included in the FY 2027 CRE, though Massachusetts lawmakers can opt out of these federal changes, as other states have done, and thereby preserve these revenues for the Commonwealth. The CRE and benchmark totals, above, also include millionaire surtax collections.
The CRE is an estimate of the amount of revenue the Commonwealth will collect in the coming fiscal year. It is based on testimony delivered (typically in December) to the Legislature’s Joint Committee on Revenue, by the Department of Revenue as well as several invited economists and state budget watchers. The CRE provides the starting point for budget writers as they build the budget proposals they will present and debate during the Legislature’s annual, January-through-June budget writing and approval process.
The FY 2027 CRE total includes $2.7 billion dollars in surtax revenues derived from the Fair Share Amendment. The FY 2026 benchmark ($43.614 billion) includes $2.4 billion in surtax revenue. This projection means lawmakers have $300 million more surtax dollars to spend on education and transportation needs in the FY 2027 budget as compared to the FY 2026 budget.
Stay tuned for MassBudget’s additional analysis of the state budget process in the coming weeks and months.
Endnotes
1The Massachusetts Department of Revenue (DOR) estimates that the same five OB3 provisions will cost the Commonwealth $463 million in lost state corporate tax revenue in the current fiscal year (FY 2026). If state lawmakers act to decouple from these five provisions in the coming weeks or months, they can preserve this revenue for the Commonwealth as well.
2It is common for the CRE to be updated one or more times throughout the fiscal year, with each revision establishing a new “benchmark” for expected collections. Somewhat unusually, there has been no revision of the FY 2026 CRE since it was announced in January of 2025, and thus the CRE and benchmark for FY 2026 remain identical.