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.

The federal government spends more than $6 trillion each year through its annual budget. The federal budget process shares some similarities with the state, but it also differs in many ways.

This resource provides a basic outline of that process and how it might affect Massachusetts.
Important Basics:

MTF's Virtual Open House, which will include an in-depth overview of the Governor's FY 2027 budget plan and a Question and Answer session. This event is open to non-members; you can register here to attend this virtual program.

Massachusetts is facing scrutiny on two fronts as public markets collapse and pressure on government pensions for its nearly 300,000 public employees and retirees and budgets rise. The commonwealth’s credit rating could take the real hit in all of this. The Boston Globe reports “the business-backed Massachusetts Taxpayers Foundation, said a prolonged market slump could make it tougher for the state to reach its goal of fully funding its pension obligations by 2037. If the state falls short, bond rating agencies such as S&P and Moody’s will pay attention.”