Press Release: 1/28/2026
Gov. files $62.8B state budget for fiscal 2027
Gov. files $62.8B state budget for fiscal 2027
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Gov. Maura Healey today filed her $62.8 billion spending plan for fiscal 2027, proposing an overall spending increase of 3.5% over the current fiscal year.
Her budget bill, known as House 2, includes incremental increases to key municipal accounts, while boosting rural school aid and continuing to fund public school accounts according to the sixth and final year of the schedule outlined in the Student Opportunity Act.
A climate of continued economic uncertainty, brought on in large part by federal government actions, hangs over the fiscal 2027 budget process. Economists and budget experts predict slow growth in the coming months, with numerous impacts on state revenues and investments resulting from the federal One Big Beautiful Bill Act (known as OB3), as well as changes in immigration and employment, tariffs, and shifts in national and international markets.
The governor’s budget recommendation is an initial step in the state budget process. Legislative hearings will follow on key budget areas, and the House and Senate will release and debate their own plans this spring, with the goal of sending a final budget to the governor before the start of the fiscal year on July 1.
“We’re very thankful for the governor’s proposed targeted investments in education, rural schools, special education, and roads and bridges through a separate transportation bill,” said MMA Executive Director Adam Chapdelaine. “We appreciate her proposal for Unrestricted General Government Aid, which we see as a starting point for a continuing conversation, given the overwhelming need for essential municipal services.”
The Division of Local Services has posted preliminary Cherry Sheet estimates for each city, town and school district based on the governor’s budget. The Cherry Sheets will be updated as each subsequent budget proposal is released.
Here’s a review of key municipal accounts in the governor’s bill:
Unrestricted General Government Aid
House 2 proposes an increase of 2.5%, or $33 million, for the Unrestricted General Government Aid account, totalling $1.36 billion. The MMA recently published two reports that emphasize the large structural gap in unrestricted aid, and this proposal falls well short of the MMA’s recommended target for the Commonwealth’s 351 cities and towns. This account remains a priority for the MMA, which is advising local officials to continue focusing on it as they discuss priorities with state legislators.
Chapter 70
House 2 would fund Chapter 70 education aid at $7.6 billion, a 3.2% increase, or $242 million, over fiscal 2026. Fiscal 2027 is the final year of the Student Opportunity Act’s six-year implementation schedule.
House 2 recommends that “minimum aid” districts — accounting for roughly 85% of all school districts — receive a $75 per pupil increase, rather than the statutorily required $30 per pupil. The minimum per pupil aid was set at $150 in the fiscal 2026 budget.
Special Education Circuit Breaker
The governor proposed $652.7 million in House 2 for the Special Education Circuit Breaker program, but would supplement it with $150 million from a proposed fiscal 2026 “Fair Share” supplemental budget bill, for a total of $802.7 million, representing a 18.8% increase over fiscal 2026. The administration said the total would represent full funding of the state’s statutory obligation costs as outlined in the Student Opportunity Act.
Charter school reimbursements
The governor’s budget would fund the charter school mitigation account at $200.4 million, a slight increase over fiscal 2026. The MMA and other stakeholders contend that charter schools continue to divert a large percentage of Chapter 70 funds away from many municipally operated school districts, and place a strain on districts that serve the vast majority of public schoolchildren.
Rural School Aid
In response to unique fiscal challenges faced by rural districts, the governor’s budget would boost Rural School Aid by $8 million, or 67%, over fiscal 2026, to $20 million. The proposal would expand eligibility to agricultural schools, independent vocational schools, charter schools, and collaboratives.
Regional School Transportation
House 2 would fund regional school transportation reimbursements at $112.3 million for fiscal 2027, a $6 million increase above fiscal 2026. The administration said this represents 87% of eligible local transportation costs.
Out-of-District Vocational Transportation
The governor’s budget proposal includes $6.8 million for reimbursements for transportation of out-of-district vocational school students, which was funded at $1 million in fiscal 2026. The administration said this investment would fund 100% of expected costs.
McKinney-Vento
Reimbursements for the transportation of homeless students under the federal McKinney-Vento Act would be funded at $35.2 million, a $6.5 million increase.
PILOT
The governor’s budget would fund payments-in-lieu-of-taxes for state-owned land at $55.4 million, an increase of 1.6% ($851,000) over fiscal 2026, which is intended to hold communities harmless from updated valuation changes.
Outside Sections
RMV holds for delinquent municipal revenues: House 2 includes several outside sections that would change the process by which cities and towns may collect outstanding excise taxes, parking ticket payments, and abandoned vehicle fines. The sections would change the current process that flags delinquent accounts for non-renewal of associated driver’s licenses and vehicle registrations.
The proposal would create a new system that would require reporting to both the Division of Revenue and Comptroller to allow payment of delinquent bills via the state’s Intercept program, which allows deductions to be made to an individual’s state tax return, lottery winnings over $600, of payments from the Commonwealth’s accounting system. Rules for the proposed program would be set by a forthcoming regulatory process.
The MMA has strong concerns that the new process, proposed through the Department of Revenue, cannot replace a critical tool that the current process provides to collect important municipal revenue. Many communities find the current process to be the only practical way to collect delinquent motor vehicle excise bills and parking tickets.
Other local accounts
House 2 proposes $20.4 million for local aid to public libraries to support their many essential community resources.
The bill also proposes $2 million for the Community Compact Program to help municipalities implement best practices in key areas, including cybersecurity, housing production, and solid waste management.
The budget would allocate $2 million to enhance staffing and emergency response capacity in communities with populations of at least 60,000 and police department operating budgets below $200 per capita in fiscal 2025.
The Local Finance Commonwealth Fellowship Program would be funded at $500,000, to provide approximately 30 participants from community colleges with municipal finance training and hands-on, work-based learning through placements in host communities.