Mass. Legislature reaches compromise on $63.4B state budget. Here’s what’s in it

Legislative negotiators on Tuesday unveiled a $63.4 billion fiscal year 2027 budget that leans into bolstering municipal finances while launching a broader reexamination of how Massachusetts funds cities, towns and public schools, pairing immediate aid increases with new commissions aimed at reshaping long-term formulas.

Lawmakers are expected to approve the compromise budget Wednesday — the first day of the new fiscal year, making it once again a late budget. It emerged after roughly a month of conference committee negotiations between the House and Senate. Lawmakers approved an interim budget Monday.

If both branches approve the compromise Wednesday as expected, Gov. Maura Healey will have until July 11 to sign, veto or return sections with amendments.

The full text of the compromise budget was not available at 4:30 p.m. Wednesday, after the conference jacket was signed. Senate Ways and Means Chair Michael Rodrigues said staffers were working on finalizing the paperwork until 3 a.m. Tuesday, and back in the building before 8 a.m. to complete the work. Healey signed the interim $7.7 billion budget on Tuesday, according to Secretary of State William Galvin’s office.

The spending plan totals about $2.4 billion, or 4%, more than the current budget while avoiding tax or fee increases and preserving the state’s Stabilization Fund. Instead, the budget intends to add another $51 million to reserves, bringing the rainy day account to a projected balance of $8.2 billion.

The House and Senate entered negotiations with budget proposals that differed by roughly $50 million, according to the Massachusetts Taxpayers Foundation.

One of the biggest policy negotiations centered on unrestricted local aid.

The Senate proposed increasing Unrestricted General Government Aid by $53 million and distributing the new funding on a per capita basis. The House proposed a $10 million increase.

Negotiators ultimately settled on a $40 million increase, bringing total UGGA funding to $1.363 billion, while retaining the Senate’s proposal to distribute the new money on a per capita basis.

Asked about discussions on that approach, House Ways and Means Chair Aaron Michlewitz said the conversation will continue in future discussions about local aid. 

“I think it was something we talked about going forward, and something that we’ll probably have to have a further conversation with, from budget to budget. But certainly something to discuss, and we appreciated the conversation that the Senate brought to the table,” he said.

The local aid compromise arrives alongside several efforts to reconsider how Massachusetts finances public education over the long term.

The budget revives the Foundation Budget Review Commission, a 29-member panel charged with examining the state’s K-12 funding formula and recommending updates by October 2028.

Rodrigues said the commission comes after the Legislature completed implementation of the Student Opportunity Act.

“I think it’s time. We fully fulfilled our obligation under the last foundation budget change, the so-called Student Opportunity Act. We completely fulfilled that responsibility. A lot has changed in the close to 10 years that we’ve looked at that change, and it’s time that we update how we distribute Chapter 70 money,” he said.

Michlewitz likewise said lawmakers are entering a new phase of school finance policy.

“Now that the Student Opportunity Act, once the governor signs this budget, once that’s finalized, once that’s implemented through this process, once that will be finally fully implemented, after seven years of discussion, I think it’s now time for us to start a new discussion about how we move forward,” he said. “New issues have arisen since 2019 … but some of the old issues are still there.”

The budget also includes House-backed reforms aimed at improving oversight of special education transportation spending, requiring additional reporting from school districts, creating a centralized transportation database and directing the Department of Elementary and Secondary Education to study the transportation marketplace. Districts often cite transportation as a major strain on their budgets.

The compromise also preserves two major House healthcare initiatives.

Negotiators agreed to extend the ConnectorCare expansion program through 2027, continuing what began as a pilot program providing subsidized insurance coverage for residents earning up to 500% of the federal poverty level.

“We’ve been prioritizing that now for a number of years. We know it’s been very successful in helping people gain insurance, affordable insurance, and benefits at lower premiums with no deductibles and reduced copay,” Michlewitz said. “I think that’s going to become even more important as we go into the uncharted territory of how things get implemented on the federal level.”

The budget also requires MassHealth, the Group Insurance Commission and private insurers to cover HIV pre-exposure prophylaxis, or PrEP, without cost-sharing requirements or prior authorization.

“We just still know that there is a community out there that has to deal with these issues, and we certainly wanted to kind of create an easier pathway for them to be able to gain the access they need,” Michlewitz said.

Among the notable Senate policy wins included in the final budget is the repeal of the state’s Learnfare policy, which reduced Transitional Aid to Families with Dependent Children benefits when children accumulated excessive unexcused school absences.

Negotiators also adopted a Senate-backed proposal removing candidates’ home street addresses from publicly available election materials, replacing them with their municipality of residence or ward and precinct. 

The proposal was first introduced by Sen. Becca Rausch of Needham and gained traction after Minnesota state lawmakers were assassinated last year. Rausch argued during budget negotiations that Massachusetts is the only state requiring candidates’ full home addresses to appear on ballots.

The budget also adopts housing permitting reforms intended to streamline local approvals for development on nonconforming properties and modernize variance standards.

Other outside sections include new criminal protections shielding 16- and 17-year-olds from sexual relationships with adults responsible for their care and wrong-way driving prevention measures.

Rodrigues singled out the child protection language as one of the provisions he was especially pleased survived negotiations.

“I just want to highlight another issue, another initiative that’s in the budget,” he said. “There was an amendment filed by Senator [Joan] Lovely protecting children from indecent assault by people in authority. We’re very happy that that survived.”

In total, there are 135 outside policy sections in the budget, most of which are annual policies that must be revived every year, Rodrigues said. 

The compromise budget also adopts a $1,750 annual cap on MassHealth adult dental services, exceeding the $1,000 limit originally proposed by Healey.

“We went to $1,750, which was in both the House and Senate budgets and an increase from what the governor recommended,” Michlewitz said.

Rodrigues said lawmakers were comfortable with the budget’s 4% spending growth because it remained within the state’s available revenues.

“We have the resources to provide that increase without raising taxes or dipping into the rainy day fund,” he said. “It’s within the margins.”