Gov. Healey signs FY27 state budget with $40M UGGA increase

With a stroke of the pen today, Gov. Maura Healey finalized the fiscal 2027 state budget process, signing the Legislature’s $63.4 billion bill without amendments or vetoes.

The law features a $40 million increase to Unrestricted General Government Aid for the year that began on July 1 and $160 per pupil for minimum new education aid.

The budget law reconvenes the Foundation Budget Review Commission to study and recommend reforms to education aid.

“We applaud the Legislature and governor for their efforts drafting a spending plan that maintains critical investments geared toward stabilizing the Commonwealth during ongoing economic uncertainty,” said MMA Executive Director Adam Chapdelaine. “We look forward to working with state leaders to build on the local aid investments included in this year’s budget as we continue to address fiscal challenges felt on the ground in communities in all corners of the Commonwealth.”

For several accounts, particularly special education, the fiscal 2027 budget is intended to be paired with funding included in a recently signed fiscal 2026 supplemental budget.

The Division of Local Services will be posting updated Cherry Sheet estimates for each city, town and school district based on the final budget.

Local investments
The fiscal 2027 budget includes the following investments in key local accounts:
• UGGA: The budget raises total UGGA funding to $1.363 billion for fiscal 2027, a $40 million increase over fiscal 2026. Three-quarters of the increase ($30 million) will be distributed to municipalities based on their proportional share of the statewide population, with no municipality receiving more than 4% of the $30 million, while the remaining $10 million of the increase will be distributed as it has been in past years.

• Chapter 70: With $7.66 billion for K-12 public education aid, the budget law will continue implementation of the Student Opportunity Act to fulfill the sixth and final year of the funding schedule, including a boost to per-pupil minimum aid from the statutorily obligated $30 per student to $160 per student — $10 more per student than was provided in fiscal 2026.

• Special Education Circuit Breaker: The budget includes $654.6 million for the Special Education Circuit Breaker program. This will be paired with an additional $152 million in aid included in a fiscal 2026 “Fair Share” supplemental budget law. The total is expected to satisfy expected claims for this account.

• Charter schools: The budget funds the charter school reimbursement account at $200.4 million, intended to meet the state’s statutory obligation to mitigate Chapter 70 losses to charter schools.

• Rural school aid: For eligible town and regional school districts, rural school aid is funded at $16 million — $4 million more than in fiscal 2026. An additional $4 million for fiscal 2027 is included in the fiscal 2026 supplemental budget bill, bringing the total investment to $20 million.

• Regional school and out-of-district vocational transportation: The budget includes two accounts intended to support school transportation needs, primarily through regional school transportation reimbursements — $57.1 million for regional school transportation alone, and $58.4 million to support both regional school reimbursements as well as out-of-district vocational school transportation (historically funded separately). In addition, $3 million was included in the fiscal 2026 surplus surtax supplemental budget for a regional school transportation reserve account that includes reimbursements for out-of-district vocational school transportation.

• McKinney-Vento: Reimbursements for the transportation of homeless students under the McKinney-Vento federal mandate is funded at $35.2 million, representing 58.2% of anticipated claims for fiscal 2027.

• PILOT: Payments in lieu of taxes is funded at $55.4 million, an increase of 1.6% over fiscal 2026, which is intended to hold communities harmless from updated valuation changes.

• Universal school meals: The budget includes $180 million to continue the universal school meals program, allowing all Massachusetts students to eat for free at school, regardless of household income.

Outside sections
The fiscal 2027 budget includes several outside sections of interest to municipalities:
• Foundation Budget Review Commission: The budget reconvenes the Foundation Budget Review Commission to examine the current K-12 public education funding formula. The commission is charged with assessing models for efficient and effective resource allocation. A first report is due no later than Oct. 31, 2028.

• Local permitting: Several of the budget’s provisions aim to support housing production through adjustments to local permitting processes. The provisions aim to simplify rules for homeowners, municipalities, and developers regarding “non-conforming” properties built under older codes; timelines for projects to proceed under existing zoning rules; and modifying the variance standard.

• Local-option COLA for long-term retirees: The budget allows an optional cost-of-living adjustment for long-term retirees in local and regional retirement boards. This section requires local acceptance.

• Special education transportation costs reporting: School districts will be required to include detailed cost components in solicitation documents and annual reporting on special education out-of-district transportation costs. Vendors will be required to provide detailed cost components during the procurement process.

• Special education transportation contract database: The Massachusetts Department of Elementary and Secondary Education will be required to create and maintain a database of procurement and contract documents for all special education out-of-district transportation.

• Special education transportation marketplace study: The budget requires DESE, along with the Operational Services Division, Department of Public Utilities, and Registry of Motor Vehicles, to study special education school transportation to identify areas to improve the vendor marketplace.