Massachusetts Legislature Passes Fiscal Year 2026 Budget to Safeguard Financial Health and Protect the State’s Most Vulnerable

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(BOSTON—7/3/2025) This week, the Massachusetts Legislature enacted a $61.01 billion state budget for Fiscal Year 2026, a fiscally responsible plan that protects core services for the state’s most vulnerable residents, maintains critical investments, and positions the Commonwealth to confront the underlying budget challenges that are a result of federal funding uncertainty. 

Approved on a bipartisan basis in both chambers, the budget neither raises taxes on residents and businesses nor spends dollars from the state’s stabilization fund—also known as the ‘Rainy Day Fund’—which currently stands at a historic $8.1 billion.  

“This FY26 budget makes key investments that better support Massachusetts students and families, that increase access to affordable health care, and that provide for a safer and more reliable public transportation system – all without raising taxes. In a moment of incredible uncertainty at the federal level, this budget is proof that government can be both fiscally responsible and an agent of good, the kind of government that our residents deserve,” said House Speaker Ronald J. Mariano (D-Quincy).  

“The FY26 budget makes important statewide investments, particularly in education, transportation and assistance to local governments, in a fiscally prudent fashion,” said Senator John F. Keenan (D-Quincy). “I am particularly pleased that my House colleagues and I secured vital funds for public-safety agencies, the Thomas Crane Public Library and year-round ferry service that will greatly benefit Quincy residents.” 

"Despite uncertain economic times, the Legislature delivered a balanced budget addressing the needs of residents in Quincy and across Massachusetts,” said Representative Tackey Chan (D-Quincy). “We were able to provide crucial investments in state services, fill the structural deficit at the MBTA, and secure more than $71 million in direct unrestricted general aid and education funding for the city of Quincy. Further, this budget supports local organizations such as Quincy Asian Resources, Inc. and the Germantown Neighborhood Center in continuing their invaluable work.” 

“This year’s budget delivers significant investments for Quincy and the Commonwealth, including funding towards improvements for affordable housing, public education, transportation, and access to healthcare,” said Representative Bruce J. Ayers (D-Quincy). “The budget also takes a major step in expanding water transportation services for Quincy residents, directing the MBTA to prepare Quincy’s ferry for year-round service by the end of 2026.” 

The Legislature’s final budget increases spending by $3.3 billion over Fiscal Year 2025, with the much of the increase attributed to MassHealth. Aligned with estimated tax revenue growth, the spending plan is based on a consensus tax revenue estimate of $41.214 billion for the coming fiscal year, a 2.25 per cent increase over the current fiscal year’s benchmark. Based on strong Fair Share surtax revenue collections to date, the Legislature’s budget includes $2.4 billion in available Fair Share generated revenues to support education and transportation investments, an increase of $1.1 billion over the last fiscal year. The Legislature’s budget invests an additional $33 million in the Stabilization “Rainy Day” Fund. With the addition, the Fund’s balance would reach a historic high of $8.26 billion by the end of FY26.  

Investments in the City of Quincy 

The Quincy delegation successfully advocated for targeted investments in Quincy’s community organizations, public safety systems, and transportation infrastructure. Quincy will receive a 1.1% increase in their Unrestricted General Government Aid, with an allocation of $23,770,570.   

Quincy investments include:  

  • $50,000 for improvements, preparedness and operations for ferry service at Squantum Point Park, as well as expanded MBTA investments into operation costs for the ferry, including funding ferry service in Quincy year-round by the end of fiscal year 2026 

  • $100,000 for Quincy Community Action Programs, Inc. for homelessness prevention services 

  • $100,000 for Germantown Neighborhood Center 

  • $100,000 for Quincy Asian Resources, Inc. 

  • $50,000 for the Friends of Faxon Park 

  • $900,000 for seasonal staff at our metropolitan beaches including in Wollaston Beach in Quincy  

  • $30,000 for upgrades to the baseball practice facilities at Quincy High School 

  • $30,000 for the Penn’s Hill Neighborhood Association, Inc.  

  • $500,000 for the Adams Presidential Center in Quincy 

  • $1,000,000 for the New England Aquarium Corporation for the operation of facilities in both Boston and Quincy 

  • $10,000 for the Thomas Crane Public Library for equipment, materials, and programming 

  • $300,000 for Quincy College student supports and services 

  • $95,000 for designated seasonal state police patrols in the Wollaston Beach and Furnace Brook Parkway areas 

  • $50,000 for the Quincy Fire Department for communications infrastructure 

  • $55,000 for Quincy’s hazardous materials emergency response program 

  • $40,000 for Quincy’s Elder Services Department for programming and services 

Education  

To support schools across the state, the Legislature follows through on the commitment to fully fund and implement the Student Opportunity Act by Fiscal Year 2027 and invests $7.36 billion in Chapter 70 state aid to public schools, an increase of $460 million over FY25. Further, the budget increases minimum Chapter 70 aid to $150 per pupil. Quincy will receive $47,604,553 in Chapter 70 education funding, an increase of 3.2% from the previous fiscal year. 

With a $1.7 billion total investment in early education and care, the Legislature is building on last year’s investments in early education, which supported the sector’s workforce, protected programming, and maintained access to affordable care for families facing economic pressures. 

Notable education funding includes: 

  • $517.6 million for income-eligible childcare. 

  • $965.7 million to provide childcare financial assistance to families in need. 

  • $83 million to maintain the current capacity and rates of the child care financial assistance program. 

  • $20 million for Childcare Resource and Referral Centers to support parents, childcare providers, employers, and community groups in navigating the state’s early education and care landscape.  

  • $20 million for grants to Head Start programs for school readiness for young children in low-income households. 

  • $5 million for grants to early education and care providers for childhood mental health consultation services. 

  • $15 million for early literacy initiatives and programs. 

  • $52.4 million for libraries, including $19 million for regional library local aid, $20 million for municipal libraries and $6.2 million for technology and automated resource networks. 

  • $103.7 million for school transportation reimbursement costs. 

For the second consecutive year, the Legislature fully funds, at $120 million in FY26, MassEducate, the Commonwealth’s universal free community college program that became law in last year’s budget. By again delivering free tuition and fees for residents, the FY26 proposal continues its support for this vital initiative that expands economic opportunity in a regionally equitable manner across the Commonwealth. 

Other education investments include: 

  • $484.9 million for the Special Education (SPED) Circuit Breaker, in addition to the $190 million included in the Fair Share supplemental budget recently signed into law. Together with Fair Share supplemental funding, the Legislature’s FY26 budget fulfills the promise of 75 per cent reimbursement for eligible tuition and transportation costs, recommending $674 million in total to reimburse school districts for the cost of educating students with disabilities. 

  • $260.8 million for financial aid and scholarship programs for in-state students attending public institutions. 

  • $30 million for higher education wraparound services for students at community colleges and state universities. 

  • $5 million to support continued implementation of the Massachusetts Inclusive Concurrent Higher Education law, including $3 million for grants offered through the Massachusetts Inclusive Concurrent Enrollment initiative to help high school students with intellectual disabilities aged 18–22 access higher education opportunities; and $2 million for the Massachusetts Inclusive Concurrent Enrollment Trust Fund. 

  • $1 million for Hate Crimes Prevention Grants to support education and prevention of hate crimes and incidences of bias in public schools. 

Transportation 

The FY26 budget includes $470 million in direct investment to support Massachusetts Bay Transportation Authority (MBTA) operations, including key initiatives like low-income fare relief, water ferry service and the MBTA Academy. Combined with the $535 million in funding from the recently passed Fair Share supplemental budget, the Legislature provides $1 billion in new investments in FY26 for operational improvements and transportation infrastructure upgrades across the MBTA system. 

Health, Mental Health, and Family Care 

The Legislature’s FY26 budget funds MassHealth at $22.1 billion, an increase of over $2 billion over the last fiscal year. As the largest cost driver in the state’s budget, MassHealth alone accounts for 62% of the total spending increase over the FY25 budget. With the uncertainty in Congress, this budget maintains access to comprehensive health care coverage for over 2 million Massachusetts residents. MassHealth covers affordable, accessible, and comprehensive health care services for more than one in four residents, nearly half of all children, and seven out of every ten nursing facility residents. 

Further, the FY26 budget invests $3.26 billion for a range of services and focused support for people with intellectual and developmental disabilities, including $2 billion for community residential services and $287 million for the Department of Developmental Services (DDS) Community Day and Work program; $187.1 million for the Bureau of Substance Abuse Services (BSAS), including $500 thousand in new funding to develop the state’s recovery coach workforce; and $650.1 million for nursing facility Medicaid rates, including $25 million to Commonwealth’s nursing facility for employee wages. 

This budget also prioritizes programs for senior residents, including dedicating $12.75 million to Meals on Wheels and other nutrition programs for seniors, $30.8 million in grants to Councils on Aging, increasing assistance per elder to $16 from $15 in FY25, and $1.82 billion to support the Personal Care Attendant program and its historic collective bargaining agreement which raised the wage scale to $25 per hour. 

$237.7 million is allocated to Department of Public Health (DPH) hospital operations, including $31 million to fully fund and maintain operations of the Pappas Rehabilitation Hospital for Children through the duration of FY26. The budget establishes a legislative commission to study the future of the Pappas Rehabilitation Hospital for Children, including a review of the hospital’s finances and programs. 

To help residents manage high prescription drug costs, the budget also extends the right of consumers to use coupons to pay for prescription drugs. The provision is extended through 2031. 

Expanding and Protecting Opportunities 

The Legislature is committed to expanding opportunity and supporting the state’s most vulnerable residents. This budget includes $467 million for Transitional Assistance to Families with Dependent Children (TAFDC) and $209 million for Emergency Aid to Elderly, Disabled and Children (EAEDC) to provide the necessary support as caseloads increase, which annualizes the 10 per cent deep poverty increases implemented in the FY25 budget. Additionally, the budget ensures that pregnant women can access TAFDC, regardless of where they are in their pregnancy. 

The Legislature’s budget dedicates $86 million to support food security and child nutrition initiatives, including $50.5 million for Emergency Food Assistance to assist residents in navigating the historical levels of food insecurity, $20.1 million for the Healthy Incentives Program (HIP) to ensure access to healthy food options, and $15.5 million for the Women, Infants, and Children (WIC) Nutrition Program. 

The FY26 budget also prioritizes workforce development programs, allocating $58.9 million for adult basic education services to improve access to skills necessary to join the workforce, $5 million for the Secure Jobs Connect Program, providing job placement resources and assistance for homeless individuals, $3.1 million for the Innovation Pathways program to continue to connect students to training and post-secondary opportunities with a focus on STEM fields, and $1 million for employment programs for young adults with disabilities. 

Housing 

As the state envisions a more fiscally sustainable path for its future, increasing affordable housing opportunities and addressing housing challenges remain at the forefront of the Legislature’s agenda. This budget therefore invests more than $1.15 billion in housing initiatives, dedicating resources for housing stability, residential assistance, emergency shelter services, and homelessness assistance programs.   

The FY26 budget provides funding for crucial programs, including $253 million for the Massachusetts Rental Voucher Program (MRVP), $207 million for Residential Assistance for Families in Transition (RAFT), $19.5 million for the Alternative Housing Voucher Program (AHVP), providing rental assistance to people with disabilities. It also includes $113.3 million for assistance for homeless individual shelters and $57.3 million for the HomeBASE program to support sustainable exits from shelter.  

In addition to these investments in housing, the budget includes a provision requiring that residential rental broker’s fees must be paid by the contracting agent, often the landlord of an apartment, ensuring that renters are not burdened with unexpected and extraordinary costs.  

Both chambers of the Legislature having voted to enact the legislation, the budget will now be sent to the Governor for her signature.