House OK’s state budget bill for FY26

Yesterday afternoon, the House approved a $61.4 billion state spending plan for fiscal 2026 that includes several important investments in schools and municipalities despite modest state revenue expectations and concerns about the potential impacts of federal government policy changes.

The House’s budget would make progress on an MMA priority by raising the per-pupil minimum new aid amount under Chapter 70 from $30 per student to $150. This would be welcome news for many districts across the Commonwealth that were statutorily set to receive a significantly smaller Chapter 70 increase.

Acknowledging the significant cost increases faced by school districts, the House budget would also invest $122.1 million for regional school transportation, $483.2 million for Special Education Circuit Breaker reimbursements, and $199 million for Charter School mitigation funding.

The House budget would level-fund Unrestricted General Government Aid, which is less than the 2.2% increase proposed by Gov. Maura Healey in the state budget plan she filed in January.

The House spent three days debating its budget plan, after consolidating more than 1,600 proposed amendments into seven categories.

The Division of Local Services has posted Preliminary Cherry Sheets to reflect the House’s budget bill.

The following are key components of the House budget for cities and towns:

Chapter 70
The House budget would continue implementation of the funding schedules in the 2019 Student Opportunity Act to stay on track for year five of a six-year plan.

The bill would leverage Fair Share surtax revenue in order to increase minimum new aid from $30 per student to $150, which would benefit 77% of school districts (245 out of 318) that were set to receive an increase of less than $150 per student.

UGGA
The House budget would level-fund the main discretionary local aid account at $1.31 billion, the same amount as the current fiscal year and $28.8 million less than the governor proposed for fiscal 2026. The MMA maintains that an adequate increase to UGGA will be essential to meet the fiscal realities facing cities and towns in the current economic climate, and will continue to advocate for a larger increase as the budget process continues.

Charter schools
The House budget would fund the charter school tuition reimbursement account at $199 million, intended to fund the state’s statutory obligation to mitigate Chapter 70 losses to charter schools.

Rural School Aid
The House budget would fund Rural School Aid at $7.5 million for eligible towns and regional school districts, a decrease from the $16 million for the current fiscal year. The grant program helps districts facing the challenge of declining enrollment to identify ways to form regional school districts or regionalize certain school services to create efficiencies.

Special Education Circuit Breaker
The House budget would fund the Special Education Circuit Breaker program at $485 million. When combined with $190 million for this account in a fiscal 2025 supplemental budget recently passed by the House, this would meet the state’s obligation for fiscal 2026.

Regional school transportation
The House budget would fund regional school transportation reimbursements at $122 million for fiscal 2026. According to updated cost projections from the Department of Elementary and Secondary Education, the proposal would reimburse 98% of anticipated claims.

McKinney-Vento
The House budget would level-fund reimbursements for the transportation of homeless students at $28.6 million for fiscal 2026. The impact of this funding level on a community will depend on the number of homeless families that remain sheltered in local hotels and motels. According to updated cost projections from the Department of Elementary and Secondary Education, the House proposal represents 58% of anticipated claims for fiscal 2026.

Vocational transportation
The House budget does not have a line item for out-of-district vocational transportation, which was funded at $1 million in fiscal 2025.

PILOT
The House budget would fund payments-in-lieu-of-taxes at $54.5 million, an increase of $1.52 million. This amount is expected to hold communities harmless from recent valuations.

Surtax investments
Fiscal 2026 is the third year for allocating revenue from the Fair Share surtax on annual incomes over $1 million. The House budget would use $1.95 billion to invest in education and transportation needs, including the following:
• Transportation Fund investment: $500 million for the Commonwealth Transportation Fund, which is a key component of the governor’s $8 billion transportation plan. This infusion of funding would provide significant capacity to increase the Commonwealth’s bond cap, leading to future investments in transportation priorities, including in local roads, bridges and culverts.
• Chapter 70 Student Opportunity Act expansion: $240 million to raise minimum aid to $150 per pupil in fiscal 2026, on top of the $104 per pupil increase for fiscal 2025.
• Green School Works: $10 million for a grant program launched in fiscal 2024 to provide financial support to public school districts to install or maintain clean energy infrastructure.
• Universal School Meals: $190 million to continue the Universal School Meals program, which allows all Massachusetts students to eat for free at school, regardless of household income.

Outside sections
The House budget includes outside sections addressing the following:

Disaster Relief and Resiliency Fund
The bill would direct the state’s comptroller to transfer $14 million from any consolidated net budget surplus for fiscal 2026 to the Disaster Relief and Resiliency Fund, which was established by the fiscal 2025 budget to provide relief to municipalities impacted by extreme weather events.

Local-option alcoholic beverages, existing licensees
The bill would allow, by local option, any onsite consumption licensee currently selling wine and malt beverages to trade the license in for a license to sell all alcoholic beverages.

Vocational admissions task force
Section 65 would establish a task force to study and make recommendations concerning vocational-technical admissions policies, and Section 68 would prohibit the Department of Elementary and Secondary Education from making changes to the policies before the report from the task force is completed.

Next steps
The state budget process now moves to the Senate, where the Ways and Means Committee is expected to release its recommendation in early May, and debate and adoption are expected later in the month.

The House and Senate will then need to reconcile their two budget plans before sending a final bill to the governor for her consideration by the beginning of the fiscal year on July 1.

During the remainder of the budget process, the MMA will work to build on the important progress in the House’s proposal as well as advocate for a greater increase in Unrestricted General Government Aid, maintaining the increase in Chapter 70 minimum aid, increasing supplemental funding for local roads and bridges, and many other key programs and policies.