As Fiscal Year (FY) 2027 nears its midway point and policymakers prepare for the FY 2028 budget process, lawmakers must also contend with closing out FY 2026. Year-end revenues have now been finalized, and the Healey administration filed their plans to close the books on FY 2026 on September 23rd, sending a $2.3 billion bill intended to address program deficiencies in FY 2026 and anticipate needs in FY 2027 to the Legislature for action.

Last week, MTF published a fiscal update brief reviewing Fiscal Year (FY) 2025 tax revenue collections, the current budget balance estimate, and the Healey-Driscoll administration’s closeout supplemental budget.

The same day that Governor Healey signed the Fiscal Year (FY) 2026 budget, while trimming $130.2 million in spending, she filed a supplemental budget proposing several fiscal management tools to help the state address revenue volatility or unmet spending needs in the months ahead.

On July 4th, Governor Healey signed the Fiscal Year (FY) 2026 budget; sending back $130.2 million in spending vetoes. Inclusive of the Governor’s budget actions, line-item spending in the FY 2026 budget would total $60.9 billion, a $3.1 billion (5.4 percent) increase over the FY 2025 General Appropriations Act (GAA). 

The House and Senate are preparing to enact a Fiscal Year (FY) 2026 budget, totaling $61.03 billion in line-item spending. The compromise budget includes $443.4 million less in spending than the final House budget and $395.1 million less in spending than the Senate budget, meaning that the Conference Report includes $941.2 million less than Governor Healey’s original spending plan.

Last week, MTF published its first Conference Committee preview for the Fiscal Year (FY) 2026 budget, Reconciling Revenue and Spending Differences Between the House and Senate Final Budgets. That brief summarized the spending and policy proposals put forward by each branch, identified shared and unique priorities, and estimated the spending and resource gap that budget writers must solve in order to send a balanced budget to the Governor’s desk. 

The Fiscal Year (FY) 2026 budget development process has now entered one of its final stages, Conference negotiations. The Conference Committee, led by the Chairs of the House and Senate Committees on Ways and Means, must reconcile all spending, policy, and technical differences between the budget bills passed by each branch; with the goal of delivering a final spending plan to Governor Healey’s desk by July 1st.

On May 22nd, the Senate finalized its $61.51 billion Fiscal Year (FY) 2026 budget. Over the course of four days of debate, $81.1 million in new spending was added and 66 outside policy sections were added to their spending plan. 

5 Things to Know:

On May 6th, the Senate Ways and Means (SWM) committee released its Fiscal Year (FY) 2026 budget proposal, six days after the House finalized its version of the spending bill following three days of debate. Spending in the SWM budget totals $61.42 billion, $3.6 billion (6.3 percent) more than the FY 2025 General Appropriations Act (GAA), $649 million less than the Governor’s FY 2026 budget, and $151 million less than the House’s proposal.