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Healy administration presents $62.8 billion House 2 with 1% growth, prioritizes affordability and targeted phase‑in of OB3 tax changes
Summary
Governor Healy and administration officials presented House 2, a $62.8 billion FY27 spending plan that holds growth to about 1%, uses $2.7 billion in fair‑share surtax revenue for education and transportation, and phases in select federal OB3 tax changes to limit FY27 budgetary impact.
Governor Healy told the Joint Committee on Ways and Means that the administration’s House 2 proposal is “about reducing energy bills in the next 2 months, making down payments more accessible to more first time homebuyers,” and is structured to protect core services while holding overall growth to roughly 1 percent.
The administration described House 2’s $62,800,000,000 bottom line as a narrowly grown budget intended to preserve essential programs while responding to disrupted federal funding. “This is a $62,800,000,000 budget proposal,” the governor summarized. Budget staff told the committee House 2 assumes $2.7 billion in fair‑share surtax revenue and includes a supplemental legislative package that would spend $1.15 billion of surplus fair‑share funds from FY25.
House 2 would devote roughly $10.4 billion to local aid and $7.6 billion to Chapter 70 school aid, officials said. The package also funds the sixth and final year of the Student Opportunity Act with an additional approximately $242 million, proposes historic investment in rental vouchers (supporting more than 11,500 vouchers), and directs about $3.6 billion for transportation across the operating and supplemental vehicles, including funding to address the MBTA’s projected FY27 operating deficit.
Faced with abrupt federal tax changes known in testimony as the OB3 law, the administration told lawmakers it prioritized a pragmatic approach: phase in select corporate provisions that Massachusetts and its stakeholders view as important (notably the research and experimental expenditures provision) while delaying or phasing other changes so the state can budget responsibly. Secretary Gorkewitz described a trigger in the administration’s proposal that would delay federal tax law changes with more than $20 million of fiscal impact to the following fiscal year.
Administration officials and the governor repeatedly framed the plan as balancing fiscal discipline with investments to reduce household costs — from childcare seats (estimated to support roughly 65,000 seats) to targeted transportation and housing programs intended to retain young families and workers. The governor emphasized case‑by‑case support for public‑safety needs in smaller municipalities and pledged that “we will not deny or withhold fire safety grants for noncompliance.”
The budget now moves to deliberation in Ways and Means, where committee members sought additional detail on distributional choices for fair‑share revenue and next steps to sustain the investments and replace any one‑time spending over a multiyear horizon.
