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H 2

An Act making appropriations for the fiscal year 2027 for the maintenance of the departments, boards, commissions, institutions, and certain activities of the commonwealth, for interest, sinking fund, and serial bond requirements, and for certain permanent improvements

194th Legislature (2025-2026)

H.2 advances a $62.8B FY27 budget with no new taxes, using Fair Share surtax funds to expand education, housing, health care, and transportation while boosting local aid.

Accompanied H5500
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WeVote Research Nonpartisan
Bill Summary · H 2

Summary of House 2 (H.2) for FY2027 Budget — Massachusetts

Jurisdiction: Commonwealth of Massachusetts | Session: 194th

Title: An Act making appropriations for the fiscal year 2027 for the maintenance of the departments, boards, commissions, institutions, and certain activities of the commonwealth, for interest, sinking fund, and serial bond requirements, and for certain permanent improvements

Date Filed: January 28, 2026

1) Purpose and overall approach

  • H.2 proposes a comprehensive FY2027 operating and capital budget totaling approximately $62.6 billion in total resources (General Fund, supplemental funds, and dedicated/non-tax revenues), with a focus on sustaining investments in transportation, education, health care, housing, and local aid.
  • The Governor characterizes the proposal as a balanced, non-tax-increasing budget designed to withstand economic volatility, protect fiscal stability, and continue investments funded in part by the Fair Share income surtax (a 9-year-old state tax on high incomes).
  • Key features include: no new tax or fee increases, a deposit of $100 million into the Stabilization Fund (without drawing from it in FY27), and enhanced long-term planning through the Stabilization Fund and a Long-Term Liability Financing Task Force.

2) Key provisions and changes

  • Total recommended appropriations: about $62.8 billion for FY27 (including $2.7 billion from the Fair Share surtax).
  • Revenue structure and forecasting:
    • Section 1A/1B: Requires quarterly reporting on non-tax revenues and a detailed breakdown of revenue by fund source, including a nine-category structure for tax transfers and non-tax revenues.
    • The budget relies heavily on non-tax federal reimbursements and departmental revenues, with a substantial portion coming from the Fair Share surtax.
  • Stabilization Fund and long-term planning:
    • No use of Stabilization Fund for FY27; instead, a $100 million deposit into the Stabilization Fund is proposed.
    • Creates policy considerations and stress-testing provisions via a Long-Term Liability Financing Task Force to improve multi-year forecasting.
  • Major program emphases and policy actions (highlights):
    • Education and child care:
    • Substantial use of surtax revenue to support the Commonwealth Cares for Children (C3) grant program: $360 million in surtax (total program funding $475 million).
    • $137 million in surtax revenues to support free community college.
    • Expanded universal school meals and accelerated preschool investments: $36.95 million for CPPI aimed at universal preschool in Gateway Cities by end of 2026.
    • Maintains funding for the final year of the Student Opportunity Act.
    • Transportation and infrastructure:
    • Ongoing implementation of an $8 billion 10-year transportation plan; $2.8 billion in total transportation funding in FY27, with $1.04 billion from surtax.
    • House 2 asserts that the MBTA’s projected operating deficit for FY27 will be fully addressed.
    • Health care and health equity:
    • Extends ConnectorCare pilot to expand subsidized coverage to those earning 300–400% of FPL, expanding access to more than 49,000 residents.
    • Increases funding for aging/independence, Developmental Services, and maternal health initiatives.
    • Housing:
    • Targeted investments in housing and homelessness prevention; increases for housing voucher programs (Massachusetts Rental Voucher Program, Alternative Housing Voucher Program, DMH Rental Program) by $137 million in surtax funding.
    • Local aid and K-12 funding:
    • Over $10.4 billion in local aid (up 4.4% from FY26), with $7.6 billion dedicated to Chapter 70 school aid, fully funding the final year of the Student Opportunity Act.
    • Economic and workforce supports:
    • Expanded workforce training and education supports, with surtax-driven investments.
    • Outside policy reforms and pilot programs:
    • Elimination of license/motor vehicle registration non-renewals for nonpayment of fines, with a tax refund intercept mechanism for unpaid municipal fines to preserve municipal revenue streams.
    • Junk fee protections to simplify cancellations and sign-ups for consumer protections.
    • Introduction of a design-build pilot program for complex transportation projects (e.g., Sagamore Bridge Replacement, Allston Multimodal) to test a new delivery method.
    • Speed camera enforcement in work zones and school zones, with privacy protections to exclude personally identifying footage.
  • Public safety and criminal justice:
    • Substantial investments across the trial and district courts, probation, and sheriffs’ departments with numerous line-item details (staffing, private detail revenues, and various trust funds).
    • Enhancements for probation supervision, recidivism reduction pilots, specialty courts, and drug/diversion programs.
    • Additional funding for public defenders, private counsel, indigent defense, and related court services.
    • Focus on regional behavioral health stabilization units to address inmate mental health and cross-county coordination.
  • Supplemental Fair Share budget (outside H.2):
    • A Fair Share supplemental bill accompanies H.2, proposing $1.15 billion in FY25 surtax surplus expenditures, including tutoring, ESOL, higher education aid, road upgrades, MBTA funding, and a new food donation tax credit for farmers.

3) Who or what would be affected

  • State agencies and programs funded through General Fund and dedicated funds (Education, Transportation, Health and Human Services, Public Safety, Housing, and more) would see expanded investments, especially in areas supported by the Fair Share surtax.
  • Local governments would receive over $10.4 billion in aid, with significant emphasis on school aid (Chapter 70) and universal meals/preschool access.
  • House 2 would impact:
    • Child care providers and families (C3 grants).
    • Higher education access (free community college initiatives).
    • Health insurers and ConnectorCare-eligible populations.
    • MBTA and regional transit funding recipients.
    • Housing authorities, DMH and aging services, and developmental services beneficiaries.
  • Criminal justice and public safety entities (courts, probation, sheriffs, district attorneys) would see detailed funding allocations intended to improve outcomes, recidivism reduction, and court operations.
  • Taxpayers: No tax or fee increases are proposed in this budget, though surtax revenue is allocated to specific programs.

4) Procedural and timeline aspects

  • The document presented is the Governor’s budget proposal to the Legislature (House 2) for the FY27 fiscal year ending June 30, 2027.
  • The plan includes quarterly revenue reporting requirements and transfer schedules for various funds (Sections 1A, 1B, 2E, 2F).
  • The budget includes explicit reporting obligations from agencies (e.g., probation, sheriffs, and court-related entities) on inmate populations, costs, and program outcomes.
  • The proposal is intended to be enacted as the Commonwealth’s balanced budget for the upcoming year, with a request for timely passage to align with the new fiscal year starting July 1, 2026.

Note: The summary emphasizes substantive budgetary choices and programmatic priorities; it omits extraneous political commentary and focuses on the bill’s provisions, funding allocations, and expected impacts.

Compiled from official sources — confirm details with the bill’s official record.

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