State Budget News

An analysis of the governor's proposed Fy26 budget

Governor Maura Healey’s budget proposes modest increases in funding for K-12 schools and one major initiative in higher education.

Thanks largely to funding from the Fair Share Amendment, the budget proposal has some good news on public school funding. The funding increases, however, only begin to address the severe fiscal crisis facing our schools and some are new initiatives that we will continue to evaluate to determine if they are likely to be helpful or could be problematic.

• The proposal includes a $420 million increase in Chapter 70. This is significantly larger than last year’s increase of $317 million. That is primarily because inflation is higher, not because of a policy change by the governor. Of the $420 million increase, $225 million comes through Fair Share funds.
• Minimum aid is funded at $75 per pupil. The governor proposed $30 per pupil last year and the final budget included $104.
• Regional transportation reimbursement is increased to 95%, and the appropriation increases by $22.6 million.
• The Special Education Circuit Breaker is fully funded. In FY25 the transportation component for this program was significantly underfunded, at 44%.
• Literacy Launch, the state’s early literacy initiative, is funded at $25 million, an increase from $20 million in FY25.
• The governor also proposed spending Fair Share surplus funds on several K-12 initiatives: å$32 million for “reimagining high school,” prioritizing college and career readiness; $75 million for capital/grants for career technical education schools; $30 million for adult basic education/ESOL; $25 million for high-dosage tutoring, or small-group or one-one-one tutoring, to help students learn to read. It appears that those allocations could be spent over several years.

In higher education spending, there is one major new initiative, continued funding of major victories from the last two years, and some reductions.

The governor’s budget proposal allocates $125 million from Fair Share funds each year, which will support $2.5 billion to $3 billion in capital funding for infrastructure improvements across public higher education campuses.

The budget maintains funding for free community college and the major expansions of MassGrant Plus, to make higher education more affordable for low- and middle-income students. It also maintains funding for SUCCESS, wraparound support services for students at both community colleges and state universities.

Campus appropriations were generally up by at least 6% to 8%, reflecting the costs of collective bargaining agreements and the FY25 formula grant amounts being rolled into campus line items.

The governor does not fund the line items that distribute additional aid, through a formula, to community colleges and state universities. That is the way increases in funding are generally provided to those colleges and universities. In FY25 community colleges received $3.76 million and state universities, $7.31 million.

Tomorrow’s Teachers — a program that provides generous scholarships to students at public colleges and universities who commit to teach in our public schools, and debt relief for public school educators — is essentially level funded at $2.5 million.

The budget also includes several tax policy proposals that will raise state revenue, including capping deductions for charitable contributions, which generates $164 million; closing loopholes to raise $145 million; and subjecting candy to the state’s sales tax, which raises another $25 million.

The budget also proposes increasing the share of health care premiums paid by longtime and retired state employees. Currently, employees hired after FY03 pay 25% of their premiums, while employees hired before that pay 20%. Retired employees pay between 10% and 20% of their premiums, depending on their retirement date. The budget proposes that all employees and retirees would instead pay 25 p% of their health care premiums.