On January 28th, the Healey-Driscoll administration filed its budget proposal for Fiscal Year (FY) 2027. The $63.36 billion plan increases spending over the FY 2026 General Appropriations Act (GAA) by $2.3 billion (3.8 percent) and over the administration’s estimated spending level for FY 2026 by $668 million (1.1 percent). The Governor’s proposal relies on $404 million in revenues tied to the passage of legislation she filed two weeks prior related to recent federal corporate tax changes.

On October 1, 2025, federal lawmakers failed to resolve a budget deadlock to start Federal Fiscal Year (FFY) 2026, resulting in a federal government shutdown. Forty days later, on November 9th, the Senate announced an agreement between Senate Republicans and eight Senate Democrats to temporarily fund the government and that agreement was signed into law by President Trump on November 12th. The funding package provided temporary funding through January 30, 2026, requiring an additional appropriations package by the end of January to prevent another shutdown.

As budget writers prepare for the Fiscal Year (FY) 2027 budget development process, they continue to closely monitor FY 2026 revenue collections and the myriad factors—stemming from both state and federal action—that impact the stability of the state budget.