By Bob Katzen
Gov. Maura Healy filed her third annual state budget, with a price tag of $59.6 billion. She also proposed an additional $1.95 billion in surtax spending that she says would stabilize the MBTA, enable critical investments in transportation and higher education infrastructure. The surtax revenue is from the constitutional amendment, approved by voters in 2022, that imposes an additional 4 percent income tax, in addition to the flat 5 percent one, on taxpayers’ earnings of more than $1 million annually.
Language in the increase requires that “subject to appropriation, the revenue will go to fund quality public education, affordable public colleges and universities, and for the repair and maintenance of roads, bridges and public transportation.”
“Our fiscal year 2026 budget proposal is a balanced, forward-looking blueprint that meets the needs of our residents and businesses while also taking care of their tax dollars,” said Gov. Healey. “We’re making historic investments in the infrastructure that our quality of life and economy depend on – stabilizing the MBTA, fixing our roads, bridges and regional transit and modernizing college campuses, all while creating good jobs,” said Governor Maura Healey. “This budget also prioritizes affordability and economic development – continuing the progress we have made in childcare, college affordability, tax cuts, housing, veterans services and more. We are able to build on this progress while controlling our spending and tightening our belts, just as families and businesses are doing across our state.”
“I hear from residents, business and local officials on a daily basis about the challenges they face,” said Lt. Gov. Kim Driscoll. “I’m proud of the way that this budget responds to those needs, while also making sure Massachusetts can sustainably support the programs and services on which everyone in Massachusetts relies. We’re fully funding the Student Opportunity Act to make sure our K-12 schools have equitable access to the resources their students and educators need, growing local aid, boosting Chapter 90 funding to improve roads and bridges and creatively investing in our infrastructure.”
The Massachusetts Fiscal Alliance was quick to criticize the proposal. The group said the budget includes a plan allowing municipalities to raise taxes on meals and hotels through local option taxes, an idea soundly rejected last year; a $164 million tax hike by setting up a cap on the charitable deductions law approved by the voters in 2000; expansion of tobacco taxes to synthetic nicotine products; and extending the sales tax to candy.
“She’s literally taking candy from a baby,” said alliance spokesperson Paul Craney. “Massachusetts residents already face some of the highest taxes in the nation, and this proposal exacerbates that burden. Taxpayers will have to spend $25 million more dollars on candy to just pay for this tax. This budget doubles down on the state’s addiction to higher taxes and spending at a time when residents are already feeling squeezed and leaving for more tax friendly states. The governor is taking a giant leap in the wrong direction. The governor has become so desperate for higher taxes that she’s even proposing caps on tax deductions for Massachusetts charities. This tax relief law was approved by the voters in 2000. If that isn’t cruel, I don’t know what is.”
“This budget exemplifies the Healey-Driscoll Administration’s disregard for fiscal responsibility,” said MassGOP Chair Amy Carnevale. “Relying on one-time revenues while increasing spending is an unsustainable path, particularly given the unchecked financial strain caused by the emergency assistance shelter program and ongoing uncertainty over monthly tax revenues. Instead of charting a path toward stability, this budget doubles down on reckless spending and higher taxes.”
The budget now goes to the House which will craft and approve its own version and then it moves to the Senate which will offer a different plan. A House-Senate conference committee will eventually hammer out a compromise version that will be approved by both branches and sent to Gov. Healey who has the power to veto any spending and any other items. The House and Senate can then choose to override any of the governor’s vetoes.