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Governor Healy files $62.8 billion FY27 budget stressing affordability, education and transportation
Summary
Governor Healy filed a $62.8 billion fiscal year 2027 budget that proposes a 1% increase in spending while prioritizing education, transportation, childcare and protections for vulnerable residents; the administration also filed House 2 and a $1.15 billion supplemental using fair-share surtax surplus funds.
Governor Healy on Wednesday announced the filing of a $62,800,000,000 fiscal year 2027 budget that seeks to limit spending growth while preserving services for vulnerable residents and investing in education and transportation.
The administration said the proposal represents a 1% increase over current-year spending and is "below the rate of inflation," framing the plan as a fiscally constrained approach to offset recent federal funding cuts and rising costs. "I'm announcing the filing of a 68 — excuse me, $62,800,000,000 budget," Healy said, praising the state budget team.
The administration emphasized a mix of spending restraint and targeted investment. Secretary of Administration and Finance Matthew Gorkowitz described the House 2 bottom line as "$60,100,000,000, not including the $2,700,000,000 in fair share surtax," and called the budget "a responsible budget that constrains growth and spending." Gorkowitz also announced a supplemental budget to spend $1,150,000,000 in surplus fair-share funds left from FY25.
Lieutenant Governor Driscoll highlighted local priorities, saying the budget "dedicates $10,400,000,000 in local aid for cities and towns in fiscal year 27," a $438,000,000 (4.4%) increase over the previous appropriation that includes a 2.5% increase in unrestricted general government aid (UGA). Driscoll added that the budget "fully funds the sixth and final year of the Student Opportunity Act," referencing Chapter 78 increases that the administration said result in a $75 per pupil increase statewide.
Transportation and infrastructure accounts figured prominently. Transportation Secretary Phil Ng credited investments and operational changes for reducing MBTA speed restrictions and increasing capacity, and cited in-house maintenance savings as an example of cost control: a bus-overhaul contract projected at $120,000,000 that the administration says can be done in-house for $40,000,000.
The administration said the surtax and the Medical Assistance Trust Fund (MATF) are constitutionally or statutorily dedicated revenue streams. Gorkowitz said the surtax has been conservatively programmed in the operating budget and that the administration is proposing to spend about $2.7 billion of approximately $3.0 billion collected in recent years, with the remainder held for sustainability.
Healy framed the budget amid what he described as significant federal actions cutting programs and increasing costs: "the president has taken a hatchet to federal funding," he said, asserting those cuts include $3,700,000,000 to Massachusetts and $1.5 billion in health-care cuts nationally. The governor said the state must protect core services for children, seniors, veterans and people with disabilities while advancing an affordability agenda focused on housing, energy and health care.
On utilities and short-term relief, Healy said he had asked utilities to remove carrying costs for customers and announced state-funded relief targeted for February and March. "I have demanded that they remove those costs, for rate payers," he said, adding the administration will continue to pursue energy-supply strategies including regional bulk procurement and renewable projects.
The administration also said it is implementing task-force recommendations to strengthen fiscal safeguards, including an annual multi-year forecast and an economic stress test for the stabilization fund. Gorkowitz said the stabilization fund could approach roughly $429,000,000 by the end of FY26 under current benchmarks and that it will act as a hedge against volatile surtax revenues.
What comes next: the administration will carry its House 2 proposal to the legislature for negotiation; Gorkowitz thanked legislative chairs for their engagement. The supplemental budget and House 2 together, the administration said, will fund ongoing needs including MBTA operating costs and targeted investments stated in the filings.
The press conference closed with questions on inflation, the surtax and immigration enforcement; no formal votes or legislative actions took place at the event.
