Healey signs surplus surtax bill with investments for cities, towns

Gov. Maura Healey today signed a $1.3 billion supplemental budget bill to allocate surplus Fair Share surtax revenue from fiscal 2024 for investments in education and transportation.

On June 18, the House and Senate passed a compromise bill released two days earlier by a conference committee.

The law includes investments in cities, towns and school districts, as well as the MBTA and regional transit authorities. Highlights for cities and towns include supplemental funding for the Chapter 90 local road and bridge maintenance program, the Special Education Circuit Breaker, and regional school transportation.

Funds from the Fair Share surtax on annual incomes over $1 million can be used only for education and transportation programs. The signed law (H. 4227) proposes $593 million for education investments and $716 million for transportation.

Allocations include the following:

Municipal infrastructure
• Approximately $103.5 million for road and bridge improvements for cities and towns, including:
– $80 million for supplemental funding for Chapter 90, with half distributed through the current formula and half distributed based on road miles
– Nearly $16.5 million for municipally owned small bridges and culverts
– $7 million for a pilot program to provide grants to municipalities for the repair and maintenance of unpaved roads

The law prohibits supplemental Chapter 90 funding to communities deemed to be out of compliance with the MBTA Communities Act. The law’s grants for culverts and small bridges require compliance with the MBTA Communities Act and will prioritize communities that are “taking meaningful steps to produce new housing or have adopted best practices to promote sustainable housing development as determined by the Massachusetts Department of Transportation.”

Education
• $248 million for Special Education Circuit Breaker reimbursements ($190 million to complement funding in the fiscal 2026 state budget and $58 million for needs in the current fiscal year, using funds from the Student Opportunity Act Trust Fund)
• $8.1 million to support regional school transportation costs
• $10 million for the Green School Works program
• $25.6 million for an early literacy tutoring initiative

Public transportation
• $535 million to support infrastructure and operational needs at the MBTA
• $25 million for regional transit authority workforce recruitment and retention
• $25 million for equipment and facilities needs for regional transit authorities
• $13 million for ferry infrastructure improvements
• $10 million for micro-transit shuttles and “last mile” grants to support a multi-modal transit system

The law includes a provision directing the Office of the Inspector General to publish a report by next February on best practices for providing transportation services, including procurement of those services.

Healey had filed her version of the surplus surtax supplemental budget in January as a key vehicle for her transportation funding plan, informed by recommendations from the Transportation Funding Task Force.