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FY26 Senate Budget Summary

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FY26 Senate Budget Summary

Questions? Contact the MAPC Government Affairs Department: Leah Robins, Norman Abbott, and Georgia Barlow

May 29, 2025 – From May 20 through 22, the Senate debated their proposed FY26 budget (S.2525), which ultimately passed that body by a vote of 38-2. Their proposal is a $61.4 billion package, a 6.3% increase over the final FY25 budget that was signed into law in July in 2024 and it is a 1.1% decrease over the Governor’s proposed FY26 budget. However, it is roughly in line with the House’s budget. Both branches added approximately $81 million to their respective Ways and Means budgets during debate.

This is the third year that Fair Share surtax revenue is available, which is proposed to be split between education ($1.185 billion or 61%) and transportation ($600 million or 31%) with an additional $165 million or 8% being transferred to the Education and Transportation Reserve Fund. The bill also includes a $1 million increase over FY25 in funding for the District Local Technical Assistance program, and a $500,000 increase over the SWM budget for the Senator Charles E. Shannon Community Safety Initiative.

While the House used their budget debate to primarily add funding for local projects and programs, the Senate was more willing to consider additional outside sections and policy provisions that would let the Health Policy Commission place a price limit on some medications, promote salary transparency for quais-public agencies, and provide more local control over liquor licenses, among others.

Other funding bills in motion: The FY26 budget is moving alongside multiple other funding bills that have implications for municipalities. H.53, An Act financing long-term improvements to municipal roads and bridges, was filed by the Governor and will authorize Chapter 90 funding for FY26. H.55, An Act making appropriations for the fiscal year 2025 to provide for supplementing certain existing appropriations and for certain other activities and projects, will allocate nearly $1.3 billion in surplus Fair Share funding from FY24 and FY25, providing one-time funds for transportation and education infrastructure and programs.

The House and Senate have taken very different approaches to allocating these additional Fair Share funding with the House proposing 76% of the supplemental budget going to transportation investments to try to right size the historic higher investment in education to get closer to a 50/50 split in the two critical areas. The Senate proposes 52% of the supplemental budget going towards transportation. In addition, both the federal budget and reconciliation are likely to have ramifications for the state’s fiscal outlook.

What comes next: The House and Senate will appoint a conference committee to craft a compromise version of the budget. That budget will then need to be passed by both the House and Senate without any further amendments. The FY26 fiscal year begins on July 1st, so it is anticipated that a final bill will be signed into law by that date or soon after, or a 1/12 supplemental budget will be needed. However, because this is a money bill, the Governor can veto certain line items and sections. If that happens, the Legislature can vote to override any vetoed provisions.

Key MAPC Line Items

Line Item   FY25 Final Budget MAPC’s FY26 - Request H.1 - Governor Budget H.4000 - HWM Summary S.3 SWM Budget Senate Budget
8100-0111 Senator Charles Shannon Community Safety Initiative $12.8M $13.4M $10.087M $10.087M $12.8M $13.4M
1599-0026 District Local Technical Assistance $3M $4M $3M $3M $4M $4M
Community Compact Grants $0 $2M $6M $0 $0 $0
Efficiency and Regionalization Grant $600,000 $2M $2M $0 $0 $0
Grant Assistance Program $2M $2M $0 $0 $0 $0

A summary of other key priorities is below. The full text of the Senate Ways and Means FY26 budget, and 90 outside sections can be found here.

Local Aid

  • UGGA: Unrestricted General Government Aid (UGGA) (1233-2350) is proposed at $1.333 billion by the Senate. This is level with the Governor’s budget, but $29 million more than the House’s budget, which put forward the same amount included in the final FY25 budget. UGGA is a crucial tool for cities and towns that funds non-education portions of municipal budgets.
  • Chapter 70: Both the Senate and the House budgets suggest $7.361 billion for Chapter 70 funding (7061-0008) which increases minimum aid funding to $150 per pupil. While the House provided $7.121 billion Chapter 70 and an additional $240 million in Fair Share funding, the Senate recommends that $7.096 billion be provided via Chapter 70 funding with an additional $265 million in Fair Share dollars. 
  • Universal School Meals: Universal school meals are once again included in the Senate’s budget proposal and is split between two line items. The first is $170 million in Fair Share funding for reimbursement to schools. This is in line with the Governor’s budget but $20 million less than the House’s budget. The second is $4.47 million or 6% more than the $4.45 million suggested for the School Breakfast program (7053-1925) by the House. Combined, the Senate’s budget proposal is 11% less than what the House put forward. 
  • McKinney-Vento Homeless Student Transportation: The Senate, House, and the Governor’s budgets include $28.6 million for the McKinney-Vento Homeless Student Transportation program (7035-0008). This is level with the final FY25 budget.

Public Health and Safety

  • Healthy Incentives Program (HIP): The Healthy Incentives Program (HIP) (4400-1004) is proposed at $25.4 million, a 35% increase from the Governor’s proposal and 27% more than the $20 million in the House’s budget. This program provides a dollar-for-dollar match for each SNAP dollar spent on fruits and vegetables at farmers markets, farm stands, and Community Supported Agriculture Programs.
  • State Action for Public Health Excellence (SAPHE): The Governor, House, and Senate proposals include $9.2 million for the State Action for Public Health Excellence (SAPHE) grant program (4512-2022). This is a 9% decrease from last year’s budget. The SAPHE Grant Program strengthens local public health services and protections to residents in 91% of Massachusetts’ cities and towns through cross-jurisdictional sharing.
  • Disaster Relief Fund: While the Governor’s budget included $15 million in Fair Share dollars for the “Disaster Relief and Resiliency Fund”, the House budget only included $14 million, and the Senate’s budget includes no money for this fund. The account is a special revenue fund administered by Administration and Finance (A&F) to support disaster relief efforts for state, local, and regional governments, businesses, nonprofits, or residents. 

Housing

  • Massachusetts Rental Voucher Program (MRVP): The MA Rental Voucher Program (MRVP) (7004-9024) is proposed at $253.3 million, a decrease of $4.8 million over the House’s budget but in line with the Governor’s FY26 proposal. This is still $34M more than last year’s budget. Through a combination of project-based vouchers and mobile vouchers, MRVP helps to move homeless families and individuals out of motels, off waiting lists, and into decent homes they can afford.
  • Residential Assistance for Families in Transition (RAFT): The Residential Assistance for Families in Transition (RAFT) program (7004-9316) is proposed at an increased level of $225 million, a 14% increase over FY25 and $23 million more than the Governor’s FY26 proposal. It is also $17.6 million more than the House’s budget. This program provides rental, mortgage, utility, and relocation assistance for those at risk of losing their home to prevent and address displacement and foster housing stability among housing insecure households.
  • Emergency Assistance Family Shelters and Services: Both the Senate and the House’s budgets propose funding the Emergency Assistance Family Shelters and Services program (7004-0101) at $275 million; $50M less than the Governor’s FY26 proposed budget and the final FY25 budget. During FY25 supplemental budgets, there were changes made to services offered to limit time and eligibility for the program.
  • Access to Counsel: Both the House’s budget and the Governor’s budget propose funding to increase access to legal counsel for low-income tenants and low-income owner occupants in eviction proceedings (0321-1800). While the Governor proposed $2.5 million for this program, the House proposed $3 million. Additionally, the House included $5 million for immigration legal services program (4003-0124). The Senate did not include any funding for either of these programs. 

Transportation

  • MBTA & Regional Transit Authorities (RTAs): MBTA (1595-6369) funding is proposed at $500 million, a 59% increase over FY25 but less than the $687 million put forward by the Governor and the House. While the House’s budget proposal stipulates that $40M will go towards the MBTA workforce academy and $10M for ferry operation grants, the Senate’s budget does not stipulate an amount that should be allocated to these programs. RTA funding (1595-6370) was proposed at $214 million by the Senate, $10M more than the House the Governor’s proposals. Importantly, the FY26 budget proposals for the MBTA will work in tandem with the FY25 Fair Share supplemental funding to address the MBTA FY26 fiscal cliff.

Environment

  • Department of Environmental Protection: The Governor, House, and Senate budgets all propose that DEP be funded at $54.1 million (2200-0100), a slight increase over FY25.
  • Department of Public Utilities: The Senate and House budgets include $18.8 million for DPU operations (2100-0012). However, an amendment was adopted to increase funding to $19.3 million. This is a $1.3 million decrease in funding over FY25 and a $1.5 million decrease over the Governor’s proposal. DPU provides critical oversight for the implementation of emissions targets for the Commonwealth. 

Economic Development

  • Childcare Grants to Providers: The Senate suggests that $325 million be allocated for the Childcare Grants to Providers (1596-2410). This is $35 million less than the House’ budget proposal, which includes $360 million for Childcare Grants to Providers, but $50 million more than the Governor’s budget. In all instances, the funding is provided by Fair Share surtax funding. 
  • MassReconnect: The Senate proposes funding the MassReconect and free community college program at $120 million (1596-2501). However, the Governor and House budgets propose funding the MassReconnect program (1596-2418) at $24 million but both provide an additional $94 million for free community via line item (1596-2501). MassReconect provides free community college to Massachusetts residents over 25 years of age.
  • Fair Share Revenue: FY26 is the third year that the Fair Share Amendment, which establishes a 4% surtax on annual personal incomes over $1 million, is available to support education and transportation. The Fair Share revenue projection is $2.4 billion; all three budgets have conservatively allocated $1.95B in their FY26 proposals. Transportation line items are proposed to receive $765 million (39%), and education proposals receive $1.18 billion (61%) in the SWM proposal.In FY25, the state allocated $250 million to the Commonwealth Transportation Fund to be leveraged for bonding for transportation infrastructure projects. The Governor proposed increasing this to $765 million for FY26 and this is one of the centerpieces of the Governor’s plan to leverage borrowing to yield $5 billion over the next 10 years for rail, roads, bridges, RTAs, culverts and more. The Senate and House’s proposals would transfer $600 and $500 million to the Commonwealth Transportation Fund respectively. This would reduce the bonding ability of those funds in comparison to the Governor’s proposal.

Outside Sections of Note

Added in Senate Debate

  • Municipal Grant Support: Allows District Local Technical Assistance funds to be used for state and federal grant applications—a priority of MAPC.
  • Broker Fees: Adds the “the agent of the lessor” to the list of parties responsible for paying a broker's fee if they engaged and entered into a contract with the licensed broker or salesperson.
  • Lowering Prescription Drug Costs: This section would let the Health Policy Commission set price limits on some drugs, among other things.
  • DTA Aid During Pregnancy: Allows the Department of Transitional Assistance to provide assistance to childbearing individuals once the pregnancy is medically authenticated, instead of just in the 3 months before birth.
  • Scientific Research Trust Fund: Creates a Scientific Research Trust Fund, subject to further appropriation, to support a number of areas.
  • Unlocking Housing Production: Directs EOHLC to study the feasibility of a housing construction sales tax exemption or other mechanism to restart stalled multifamily home construction where projects were stalled by material cost. It also directs them to study the possibility of letting municipalities exempt new affordable housing from certain tax limits, among other things.
  • PFAS: Directs DPH to include the health threats of PFAS in the Environmental and Community Health Hazards Program.
  • Crumbling Foundations Taskforce: Creates a working group to develop recommendations for regulatory and legislative changes necessary to address and finance a Crumbling Concrete Assistance Fund.
  • Returning Liquor License Control to Municipalities: Provides municipalities with more authority to make decisions about the number of liquor licenses while also providing additional local control.
  • Promoting Public Payroll Transparency: Would require that quasi-public agencies make public salary information.
  • To Ensure Adequate and Equitable Funding for Public Education: Provides $200,000 to DESE to study whether current target local contributions for municipalities are equitable and if changes need to be made, among other things.

Added in House Debate

  • School Sports Report: The House included an amendment that would further study school sports participation and outcomes as it pertains to Title IX. The study would require school districts to report to DESE on the outcomes for certain teams, injuries, and if additional restrictions are needed to comply with Title IX.
  • Supporting caregivers running for public office: Would allow campaign funds to be used for adult care services for adult dependents.
  • RTA Allocations: An amendment was adopted that would ensure that each RTA receives at least the funding they received in FY25, and that an additional $3.5m will be distrubuted using the following formula: 60% based on total ridership, 30% based on the population of its member communities from the most recent census; and 10% based on service coverage area.
  • Secure Choice Retirement Savings: Creates an individual retirement account (IRA) program—at no cost to employers—that would automatically enroll workers who don’t have access to employer-based retirement benefits.
  • Individual & Business Relocation Commission: Establishes a commission to study the factors contributing to businesses and individuals relocating to and from the commonwealth. It will look at tax policy, cost of living, economic opportunities, and more.

Only in Senate Ways and Means

  • Housing Production Dashboard: Requires the Executive Office of Housing and Livable Communities to maintain publicly accessible online dashboard that displays the sources of funds for all housing production and preservation as well as the number of units included, affordability mix, and whether the units will be rented or owned, among other requirements.
  • Transportation Funding Tracking Website: Requires MassDOT to similarly create a publicly available website that tracks spending and progress on projects that cost more than $1 million.
  • Fare-Free Regional Transit Authorities: Allows RTAs to operate fare free transit and report on ridership to MassDOT.
  • Unrestricted General Government Aid Distribution Review Commission: Creates a commission to study the method used to distribute UGGA to municipalities. The commission will evaluate the effectiveness and equity of the current method and make recommendations to maximize these outcomes in the future. The commission will include the Secretary of ANF, MMA, Mass Budget and Policy Center and 3 members appointed by the Governor. The report is due by July 1, 2026.

Included in SWM, House, and Governor’s Budget Proposals

  • Gaming Fund Splits: Directs 100% of the revenue received from a category 1 casino licenses to several funds. However, the Casino Mitigation Fund is not included in this breakdown, meaning that the Mitigation fund will be without a source of revenue for the second year in a row. All three proposals only apply to FY26.
  • Residential Broker Fees: SWM budget bars realtors or lessors from charging more than the first and last month's rents along with a security deposit of an additional month. Tenants could still be responsible for a broker’s fee if they contracted with them. The Governor’s budget would require that any residential broker fee be paid by the owner and not the renter and the House’s budget proposes a system where a tenant may still be responsible for paying the residential broker fee under certain conditions.
  • Education and Transportation Fund Technical Update: Increases the amount of dedicated transportation income surtax revenue to the Commonwealth Transportation Fund to $600 million from $250 million. The Governor proposed increasing this to $765 million and the House proposed $500 million

Only in the House’s Budget

  • Vocational-Technical Education Admissions Task Force: Creates a taskforce to make recommendations on vocational-technical education admissions and wait list policies.
  • Telehealth Task Force: The task force will investigate the barriers and impediments to the practice of telehealth across state lines.

Included in House and Governor’s Budget Proposals but not SWM.

  • Health Connector 500% FPL Connector Care Pilot Extension: Extends the Connector Care pilot for an additional year.

Included in the Governor’s Budget & Not Included in SWM or HWM Budget Proposals

  • Sales Tax on Candy: Subjects candy and confectionary to the 6.25% sales tax.
  • Speed Camera Enforcement: Authorizes MassDOT to establish a speed camera enforcement program. It also allows municipalities to enforce posted speed limits through speed cameras.
  • Education and Transportation Fund Technical Update: Increases the amount of dedicated transportation income surtax revenue to the Commonwealth Transportation Fund to $765 million from $250 million.
  • Taxation of Products Containing Synthetic Nicotine: Taxes synthetic nicotine (like Zyn or Velo pouches) like tobacco products.
  • Universal Adult Vaccine Program: Allows DPH to establish and administer an adult vaccine distribution program.
  • Charitable Donation Deductions: Caps state charitable deductions for families at $10,000 and for individuals at $5,000.
  • Health Connector 500% FPL Connector Care Pilot Extension: Extends the Connector Care pilot for an additional year.