For the second year, the Healey-Driscoll administration and policymakers in the House and Senate have put forward an Innovation and Capital Fund supplemental budget to complement the annual budget development process for FY 2027. The supplemental spending bill appropriates a total of $1.9 billion, $1.3 billion of which is supported by supplemental surtax revenues currently stored in the Innovation and Capital Fund.

This year, the House and Senate also include funding in the supplemental budget to address non-surtax FY 2026 mid-year deficiencies, as well as policy proposals related to Massachusetts’ conformity with certain tax provisions included in the federal One Big Beautiful Bill Act (OB3). The Innovation and Capital Fund supplemental budget offers an opportunity for policymakers to make meaningful investments and explore solutions for challenges facing the state. The House and Senate will reconcile the differences between their two versions of the bill in a Conference Committee before delivering a final version to Governor Healey for her signature.