With the high costs that make Massachusetts an expensive place to live top of mind for both state government and most Bay Staters, the Legislature began to wrestle Wednesday with the challenge of balancing fiscal responsibility and spending restraint with state budget investments that could make life easier for residents.
Senate Ways and Means Chair Michael Rodrigues opened the first of eight Joint Ways and Means Committee hearings on Gov. Maura Healey’s fiscal 2027 budget plan (H 2), a $63.36 billion proposal that would increase spending by 3.8% over the budget she signed last summer, by saying that it “arrives at a precarious time.”
“Our residents are feeling the immense pinch of high cost in child care, health care, housing, electricity and food as they work to support themselves and their families. As families tighten their belts, it is important that we in state government do what we can to live within our means, take steps to control costs and explore opportunities to make Massachusetts more affordable,” Rodrigues said.
Healey acknowledged that “these are challenging times” and ticked off federal government policy shifts that she says have disadvantaged Massachusetts. The governor’s budget proposal assumes about $15.829 billion in federal reimbursement revenue, $219.2 million or 1.4% more than the budget she signed last year, according to the Mass. Taxpayers Foundation.
She said the budget plan that will eventually be rewritten, debated and passed by both the House and Senate this spring “represents our best effort, our best attempt to make this work.”
“We’re in a moment right now, and everything’s about a balance. Everything is about a balance right now,” Healey said.
Administration and Finance Secretary Matthew Gorzkowicz told the committee the administration’s goal in development of the budget was to limit the growth of accounts and seek efficiencies rather than have to eliminate programs. That approach, and the results it produced, was on display as Healey and Gorzkowicz faced questions from lawmakers.
Sen. Liz Miranda brought up changes the budget contemplates for the personal care attendant program, which makes part-time caregivers available to people with disabilities, the elderly and others. Healey’s budget assumes that MassHealth will implement recent recommendations to save the program $32 million annually.
“So I’m just trying to figure out how we justify, in a system that is already vulnerable people taking care of vulnerable people and we’re having a lot of impact from the federal cuts, why are we making even deeper cuts?” Miranda (D-Boston) asked the governor.
Healey said she understands the importance of PCAs and the services they provide. But she also told Miranda it was a matter of choosing between bad options.
“Look, this summer, the president and Congress took a trillion dollars out of health care. That bleeds down and affects all of our budgets. So in this proposal ... cutting back on some of the meal time, prep time, that sort of thing, it’s only because of the cuts that we’re trying to manage,” Healey said. “And as you know, looking at HHS, it’s which vulnerable population are you going to disadvantage over another vulnerable population? So that was what we were dealing with.”
Gorzkowicz has said he expects health care costs to be the greatest challenge in managing the budget through fiscal 2027, something Rodrigues echoed in his introductory remarks.
“Post pandemic, MassHealth costs are growing faster and outpacing revenue growth, which, if left unchecked, will create a fiscal storm that could undermine our capacity to deliver services that our residents rely on,” he said.
Just the combination of MassHealth ($22.7 billion gross, net state cost of $9.3 billion) and other HHS spending adds up to about half of the budget, officials said. And 80% of the budget is eaten up by the combination of unrestricted local aid, Chapter 70 school aid and other education spending, debt service and health and human services spending.
For school aid, Healey’s budget fully funds the final year of the Student Opportunity Act with $7.6 billion in Chapter 70 aid. That represents a $242 million increase over fiscal 2026 and would guarantee a minimum per-pupil aid of $75 for all school districts, the administration said.
But educators, lawmakers and advocates have long been warning that the increases realized through the Student Opportunity Act are unevenly distributed. On Wednesday, there was bipartisan agreement that it is time for Beacon Hill to begin rethinking how the state and municipalities split education costs.
“As a general matter, we recognize that cities and towns across the state are really struggling with their own budgets right now ... we recognize a lot of it’s attributable to health care costs, premiums,” Healey said when House Ways and Means Chairman Aaron Michlewitz asked her for her thinking for what should come after the Student Opportunity Act.
Pressed on the matter by Republican Sen. Kelly Dooner of Taunton, Healey said she knows “this is an issue that everyone struggles with” and suggested it will be something she tasks incoming Education Secretary Stephen Zrike Jr. with working on.
“I’ll say that my team stands at the ready to engage in further conversations about this and collaboration, about a best way forward, understanding the really challenging circumstances that districts are facing,” she said. “I’m excited and you’ll come to meet the new secretary, Secretary Zrike, who’s the superintendent out of Salem, and you know, is going to bring a real focus to to all things education. But you know, we know that this is something that we want to engage in with you all on. We hear the same as you hear and understand. You know, we’re at a moment right now where we need to have that discussion.”
The Student Opportunity Act was put in place in 2019 with an eye towards helping historically underserved districts with large numbers of low-income students, English language learners and students with special needs. But in recent years many other districts have been struggling with inflation, the end of pandemic-era federal aid, and rising costs for special education, health care and school transportation.
“We’ve infused a lot of money for education, and it’s good. But at the end of the day, when you have a lot of communities that look at the way this money is broken out, I think there is a serious divide between urban communities, Gateway Cities, and what other municipalities and school systems are getting in the commonwealth. They look at these numbers and they just don’t see the equity there,” Republican Rep. Todd Smola of Warren said. “And the Chapter 70 formula, I think it’s long overdue to overlook at it, because most municipalities don’t completely understand it. Most legislators that are sitting on this panel don’t completely understand it, how it translates, how it works.”
Many school leaders spent the last two springtime state budget hearing seasons warning that the latest annual Chapter 70 increase would not do much in their communities. In the fiscal year 2026 budget that Healey signed, lawmakers directed the Department of Elementary and Secondary Education to study the K-12 school funding formula related to local contribution requirements.
That report is due back to the Legislature by June 30, 2026.
During his introductory remarks, Michlewitz lamented federal changes that have meant less support for the state and said he thinks the Massachusetts economy -- and Beacon Hill’s budget management -- will weather that storm.
“Our recent revenue numbers continue to show the resiliency of our economy here in Massachusetts despite some of those headwinds,” he said. “It shows that while some folks are almost wishing us into some type of recession for political gain, the leadership in this State House will continue to navigate our fiscal stewardship with persistence.”
The Joint Ways and Means Committee will hold six additional hearings around the state, each one focused on a particular part of the budget, before returning to Boston for a general public hearing in late March or early April. The hearings -- locations for which have not been announced -- are planned for March 9 (economic development, housing, and technology and security), March 10 (environment, energy and transportation), March 16 (health and human services), March 23 (local aid and education), March 24 (public safety and the judiciary), and March 27 (health and human services).
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