Fact Sheet and Highlights: Legislature’s Fiscal Year 2027 Budget

Top Line Spending

Total Budget. The Fiscal Year 2027 (FY27) budget agreement totals $63.4 billion in spending, an increase of $2.4 billion, or 4 per cent, over Fiscal Year 2026 (FY26).

Total Fair Share Funding. The budget agreement totals $2.7 billion in Fair Share spending to support public education and improve the Commonwealth’s public transportation system. Together with the $1.35 billion in the consolidated Fair Share supplemental budget signed into law earlier this month, the Legislature is directing over $4 billion in Fair Share resources to invest in education and transportation initiatives vital to our state’s economic health and success.

Taxes and Stabilization Fund

Taxes. The Legislature’s budget does not raise taxes or fees on Massachusetts residents or businesses.

‘Rainy Day’ Savings. The Legislature’s budget dedicates an additional $51 million in the Stabilization Fund. With this addition, the Fund’s balance would reach a historic high of $8.2 billion by the end of FY27.

New Initiatives and Investments

Foundation Budget Review Commission. The budget agreement revives the Foundation Budget Review Commission (FBRC) to examine the current K-12 funding formula. The FBRC will assess potential new ways to address rising costs and the allocation of school resources statewide. This agreement reflects the Legislature’s recognition that school districts statewide face serious fiscal challenges related to escalating costs of special education, student transportation, personnel, educator health care, and other factors.

COLA Reform Supporting Retirees. The agreement includes comprehensive changes to cost-of-living adjustments (COLAs) based on the recommendations of the Special COLA Commission. The compromise reached provides a fiscally prudent way of funding enhanced future COLA increases for retired public employees. The budget agreement includes provisions that create a COLA Reserve Fund for future state/teacher COLA benefit increases and requires that in calendar years where PRIM exceeds the target rate of return on pension reserve funds, 7.5 per cent of the excess return will be transferred into the COLA Reserve Fund. The budget also provides enhanced COLA benefits for certain current retirees based on their number of years in retirement, and allows the base amount used to calculate future COLAs to be increased in $1k increments, subject to the availability of sufficient funds in the COLA Reserve Fund.

Streamlined Local Permitting to Unlock Housing Production. Building on last session’s Affordable Homes Act, the budget agreement includes numerous provisions to streamline local permitting, support development on nonconforming properties, provide reasonable timelines for projects to move forward under existing zoning rules, and modernize the variance standard—all aimed at meeting housing demand, boosting production, and driving down costs.

Protecting Children from Indecent Assault. The agreement includes provisions shielding children from sexual exploitation and abusive power dynamics by protecting children aged 16 and 17 from sexual interactions with people who are responsible for their care and oversight—mandated reporters such as teachers and coaches, police officers, and social workers.

Sports Wagering Fund Adjustments. The agreement includes adjusting Sports Wagering revenue to incorporate 5.5% to the Sports and Entertainment Fund and 2% to the Economic Development Trust Fund to incorporate dedicated funds to enhance the economic growth of the Commonwealth.

Wrong Way Driving. The budget agreement addresses the all-too-common occurrence of wrong-way driving on highways–leading to multiple fatalities this year, including the tragic line-of-duty death of State Trooper Kevin Trainor—by requiring new infrastructure and new officer trainings to prevent and mitigate the damage from wrong-way driving. MassDOT would be responsible for new protocols that include directional striping on access ramps, signage, and lane delineators, while also implementing messaging systems to alert motorists to the threat of an active wrong-way driver.

ConnectorCare Expansion Pilot Program. The agreement extends the ConnectorCare expansion pilot program through 2027. Since the pilot began in 2024, over 115,000 individuals have gained more affordable insurance and received benefits such as lower premiums, no deductibles, and reduced co-pays, further helping residents access necessary care, including preventive services and medications for chronic conditions.

PrEP Insurance Coverage. The budget agreement codifies into Massachusetts law existing federal protections under the Affordable Care Act requiring comprehensive coverage of HIV pre-exposure prophylaxis (PrEP) and related services without cost sharing, prior authorization, step therapy, or other utilization management barriers.

DDS Turning 22 Commission. The agreement establishes a commission to study the current delivery of transitional youth services to persons with disabilities whose access to services under special education programs will terminate because of high school graduation or turning age 22. To address a trend of record caseload growth and the growing acuity needs of this population, the commission is tasked with recommending solutions to address gaps in service delivery and improve transition planning services and Turning 22 program outcomes for individuals with disabilities and their families.

Wraparound Services for Students Receiving Special Education. $11.7 million to support students receiving special education services with wraparound support through the DESE/DDS Residential Prevention Program, which promotes independence, and social integration at the student’s home, in school, and in the community. The Legislature is working to preserve community-based solutions for this critical population in the face of the federal government’s recent challenge to the validity of Olmstead v. L.C., the landmark ruling that allowed people with disabilities to receive services while living in the community instead of in an institution.

Healthy Social Media Use. $2 million for a new school-based educational grant program to support programs in local school districts that tackle young people’s addictive social media usage and teach kids how to have safe, responsible, and healthy social media usage.

Assisted Living Safety. In response to the tragic fire at Gabriel House in Fall River, the budget agreement provides $500,000 for the implementation of recommendations set forth by the Assisted Living Residences (ALR) Commission. This funding will help to meaningfully implement the findings of the Commission to improve safety standards, protections, emergency preparedness and oversight for assisted living residences across the state.

EMS Study. The budget agreement directs executive agencies to study and recommend a plan to modernize and improve the efficacy, service delivery, and long-term sustainability of emergency medical services in the Commonwealth. The study will explore best practices in other states, the current state of the EMS workforce, and the feasibility and fiscal impacts of transferring the administration and oversight of the state emergency medical services system from DPH to a new agency within EOPSS.

Continued Initiatives

K-12 Education and Student Opportunity Act. The budget agreement satisfies the state’s long-standing commitment to fully implementing the Student Opportunity Act (SOA), investing $7.66 billion in Chapter 70 education funding, an increase of $297 million over the FY26 amount, making it the highest level ever. The budget agreement also increases minimum aid for school districts to a historic level of $160 per pupil, devoting additional resources to school districts feeling the weight of rising costs and ongoing fiscal pressures.

Unrestricted General Government Aid. $1.363 billion in funding for Unrestricted General Government Aid (UGGA)—a significant increase of $40 million over FY26—resulting in the highest funding level ever as cities and towns deal with rising costs and stagnant revenue growth. The budget agreement also includes a new funding formula for new UGGA funds to more equitably distribute the increase among communities statewide and deliver meaningful relief for every city and town.

MBTA. $465 million in direct investment to support the MBTA system. Combined with the $595 million in funding from the recent consolidated Fair Share supplemental budget, the Legislature is providing over $1 billion in new investment in Fiscal Year 2027 for operational improvements and transportation infrastructure upgrades across the MBTA system.

Regional Transit Authorities. $217 million for Regional Transit Authorities to support regional public transportation systems, including $40 million to sustain systemwide fare free transit service.

Special Education Circuit Breaker. $654.6 million for the Special Education (SPED) Circuit Breaker, in addition to the $152 million included in the recent Fair Share supplemental budget law. Together with the Fair Share supplemental funding, the Legislature is providing $806.6 million to reimburse school districts for the rising costs of educating students with disabilities and complex needs, funding 75 per cent of reimbursements to districts for both tuition and transportation.

Universal Free Community College. $137 million to fund the MassEducate and MassReconnect free community college program, ensuring any qualified Massachusetts high school graduate can attend community college at no cost, an increase of $17 million over FY26.

Commonwealth Cares for Children (C3) Grant Program. For the fourth year in row, the Legislature with this budget agreement invests $475 million for the C3 operational grant program, supporting critical operational and workforce initiatives across the early education sector.

Rural School Aid. The budget agreement includes $20 million to support rural school districts, an increase of $8 million over FY26. The allocation includes $16 million in the General Appropriations Act in addition to the $4 million included in the recent consolidated Fair Share supplemental budget.

Free School Meals. The budget agreement includes $180 million for universal school meals, ensuring all students in Massachusetts can receive free breakfast and lunch at school, regardless of their family’s income.

Combating Food Insecurity. To combat hunger and protect access to food security initiatives, the budget agreement includes $56.1 million for Emergency Food Assistance to assist residents in navigating food insecurity, an increase of $6.1 million over FY26, and $21.5 million for the Healthy Incentives Program (HIP) to support local farmers and ensure access to healthy food options.

Children’s Clothing Allowance. The budget agreement fully annualizes recent benefit increases through Transitional Aid to Families with Dependent Children (TAFDC) and Emergency Aid to the Elderly, Disabled and Children (EAEDC) to address deep poverty and includes a $500 clothing allowance per child for families receiving TAFDC benefits.