Governor presents $59.6 billion House 1 budget focusing on housing, transportation, education and mental health

Governor Maura Healey on Friday presented the administration's House 1 fiscal year 2026 budget, a $59,600,000,000 proposal she described as “balanced” and “fiscally responsible,” highlighting investments in affordable housing, transportation, education and behavioral health.

The budget addresses the 5 W's up front: it is House 1 for FY26, filed by the Office of the Governor and the administration, proposes a 2.6% increase in core spending compared with the current fiscal year, and is accompanied by a supplemental plan to spend $1,320,000,000 in surplus fair share surtax revenue from FY24. The administration said the combined package would unlock long-term capital for a 10-year, $8,000,000,000 transportation program and support a $5,000,000,000 Affordable Homes Act.

Why it matters: the proposal sets the administration's fiscal and policy priorities for the upcoming budget negotiations with the Legislature, directing large sums to housing production, local aid and higher education capital needs while proposing changes to several existing programs and funding rules.

The governor opened the presentation by thanking agency teams and framing the budget as a continuation of the administration’s priorities. “We have focused on things that matter to people in Massachusetts,” she said. “The $59,600,000,000 budget that we file today will continue all of that progress and builds on that progress in new and transformative ways.”

Key allocations and proposals detailed by the administration include: - Housing: The budget builds on the Affordable Homes Act and pairs House 1 with a supplemental plan to help deploy $5,000,000,000 in housing funding the administration said is intended to accelerate construction so “we want shovels in the ground” this year. - Transportation and infrastructure: A 10-year, $8,000,000,000 plan to repair roads, bridges and regional transit; the plan also uses fair share surtax revenue to stabilize and improve the MBTA. The administration said the combined investments and fair share spending will unlock $8 billion for transportation over the next decade. - Local aid and municipal programs: House 1 proposes more than $9,200,000,000 for local aid, a $480,000,000 (about 6%) increase over FY25; it also proposes a 50% increase to Chapter 90 local road funding (about $100,000,000 additional) and $200,000,000 for culvert projects for flood protection. - Education and higher education capital: The budget fully funds the Student Opportunity Act, proposes $475,000,000 for early childhood (C3) grants and $67,700,000 for a universal access high partnership initiative (CPPI). In addition, the administration filed a higher education bond bill estimated to unlock $2,500,000,000 to modernize and decarbonize 29 state campuses. - Behavioral health and health care: The proposal includes about $1,200,000,000 for mental health programming within the Department of Mental Health and expands 24/7 access at community behavioral health centers, which the governor said aim to divert young people from emergency departments. - Aging and local supports: The administration said it renamed the Executive Office of Elder Affairs to the Executive Office of Aging and Independence and proposes $1,000,000 in grants for municipalities that meet criteria to be designated “age friendly.”

The administration also included policy and revenue changes: a supplemental budget to spend $1,320,000,000 in surplus fair share surtax dollars collected in FY24 (the administration said $2.4 billion was collected in surtax, far exceeding initial projections), targeted savings and revenue adjustments to avoid drawing on the stabilization fund, and proposed authority to revisit some unspent pandemic-era appropriations to yield an estimated $200,000,000 in savings.

On some program specifics, the governor defended changes that reduce the pace of certain emergency-assistance disbursements. Asked about a proposed shift in Rental Assistance Program (RAP) disbursements from 7,000 over one year to 7,000 over two years, Governor Healey said, “I think we gotta live within our means, first of all,” and pointed to case-management reforms and other housing actions intended to reduce shelter demand.

The administration flagged additional program-level proposals and questions raised by reporters, including possible caps or changes to the state charitable deduction, reclassifying some grocery items (the governor used the example of candy) and a plan to review large, previously authorized pandemic-era line items for unspent or unobligated funds.

On immigration enforcement, in response to a question about a Justice Department inquiry the governor said she had not seen a directive and expressed no concern, adding that state and local officials “follow the law” and that cooperation with federal authorities on criminal investigations will continue.

The governor also addressed proposed changes to state-run public health facilities, saying closures or consolidations would be handled cautiously and that proposals respond to low utilization at some sites and aging infrastructure at others. “In one place, we have a low utilization rate of only 16 beds,” she said, and in another “about 39 individuals [are] housed.”

Lieutenant Governor Kim Driscoll emphasized municipal supports in her remarks: “That’s why it increases local aid for cities and towns while fully funding the Student Opportunity Act,” she said, and noted the administration’s proposal to fund age-friendly grants and to raise Chapter 90 commitments.

Matt Gorkowitz, secretary of administration and finance, and members of his team outlined House 1’s topline and the work behind the proposal; Gorkowitz said the bottom line holds spending growth to 2.6%, below recent inflation, and described House 1 as “balanced, responsible, and forward-looking.” He also described the supplemental fair share proposal as intended to create an “equity” split between education and transportation when combined with operating-budget allocations.

What did not change in the presentation: House 1 is a filing and the proposals now go to the Legislature for committee review, amendments and appropriation. The administration repeatedly said the proposals are subject to the legislative process and to further negotiation.

The presentation closed with the administration inviting legislative engagement and public questions; no formal votes or motions were recorded during the event.

The administration provided multiple numeric details during the briefing; some items—such as the number of beds or the precise future timing for program changes—were explained as estimates or “not specified” for implementation timing.

Looking ahead, the governor said she looks forward to working with the Legislature to finalize a budget that “keeps Massachusetts moving forward.”