The State Budget
There is a seven-step process to finalize the Commonwealth Budget for FY 2027, which begins on July 1, 2026. The Governor proposed a budget in January. Senate consideration is Step 4 of a seven-step process to reach a constitutionally mandated balanced budget process.
Step 1: The Governor’s Budget. Governor Healey’s office was conducting budget hearings to learn residents’ priorities and seeking input from her agencies to inform her budget decisions.
The state budget process begins by determining revenue. There is an assessment of how well the state’s economy is doing and an examination of past trends in the collection of income, sales, business, and other taxes, as well as from lottery sales. All these estimates together help state elected officials estimate how much money the state will have available (the “revenue”) to fund the state’s budget for the coming fiscal year. This is known as the “Consensus Revenue Estimate” (CEI), and the amount is reported on many newscasts as residents compare it to the previous year’s figures.
The Governor and Legislature use the CRI as a base for their budget proposals to ensure balanced budgets. For the FY 2027 budget (note: July 1 is the start of FY 27), the CRI was set at $44.9 billion in Jan 2026. The estimate includes projected tax revenue growth (e.g., 1.7% to 3.1%), consideration of economic indicators, the “millionaire surtax,” and federal tax law changes in the creation of the ”balanced budget” as required by the state constitution If the Governor or Legislature wants to spend more than is agreed in the CRI, their budget proposal will have to include new revenue proposals.
Governor Maura Healey sent her FY 2027 budget proposal to the Massachusetts Legislature on Wednesday, January 28, 2026. Known as House 2 (H.2), the $62.8 billion spending plan follows the state constitutional requirement to submit a proposal by the fourth Wednesday of January. Key features of her submission included:
- Spending Increase: A 1% to 3.8% increase over the previous fiscal year, depending on the inclusion of surtax revenue.
- Fair Share Surtax: Allocates $2.7 billion from voter-approved surtax revenue toward education and transportation.
- Education Aid: Proposes a 3.2% increase for Chapter 70 education aid and $20 million for rural school aid.
- Local Support: Includes $1.36 billion for Unrestricted General Government Aid to support municipal services. This is the funding that helps towns balance their budgets.
Step 2: House of Representatives Budget (April) The House Committee on Ways and Means (HWM) reviewed the Governor’s budget and, after conducting public hearings, drafted its own version.
The House budget was finalized on April 29th. Items of interest to residents of Berkshire County in the House’s budget include:
- Rural School Aid: The House bill funds rural school aid at $10 million for eligible towns and regional school districts. While this is a priority, it is $2 million less than in fiscal year 2026. There is an expectation that the millionaire’s tax revenue will plug this hole.
- Education Funding (Chapter 70): The budget includes $7.66 billion for Chapter 70 education aid, marking the sixth and final year of the Student Opportunity Act (SOA) implementation.
- Special Education (Circuit Breaker): An additional $2 million was secured for the Special Education Circuit Breaker, aimed at helping districts manage high-cost, intensive needs education.
- Regional Transportation: The House budget provides $112.3 million for regional school transportation and $6.8 million for out-of-district vocational transportation.
- Road Maintenance (Chapter 90): Following a previous 2025 law, many Berkshire towns are seeing a 75% to 90% increase in Chapter 90 funds for bridge and highway projects.
- Local Housing Repair: 10 towns are receiving a combined $4.5 million in federal funds to repair aging housing stock.
Step 3: House Budget Debate and Passage (April 2026)
The full House of Representatives debated, amended, and voted on the House Ways and Means budget proposal. Once approved by the House, this became known as the House 2 on April 29, the $63,41 billion budget bill was finalized
Step 4: Senate Budget Development begins.
Editor’s note: Proposed budget MA FY 2027 is $63.3 billion
