Balancing the state budget this year won’t be easy. There are intense pressures placed on the Massachusetts budget by federal government cuts and rising health care costs. A state tracker estimates that federal actions will cost Massachusetts more than $2.1 billion between fiscal 2025 and fiscal 2027. Simultaneously, taxpayers can’t afford to pay more. Already, residents are leaving the state, partly due to high costs of living and higher taxes.
The fiscal 2027 state budget proposal Governor Maura Healey released Wednesday largely reflects this reality. Her budget offers no blockbuster new ideas or vastly expanded programs. It also appears to have no draconian cuts — no facility closures or broad layoffs — relying on small cuts and policy changes while continuing to determine new ways to lower spending. The $63.4 billion bottom line is a 3.8 percent increase over the fiscal 2026 budget, and an estimated 1.1 percent more than this year’s estimated spending.
Unlike Healey’s previous budget proposals, this year’s budget includes no new taxes or fees. That’s the right move, in recognition that state residents can’t afford any new burdens on their pocketbooks.
Healey said at a State House press conference that her focus is on preserving state services while addressing funding shortfalls and helping residents afford to live here. “I’m working my damnedest every single day to identify ways we can lower costs for housing, energy, and health care,” Healey said.
Some of her biggest initiatives were announced previously: spending $250 million on Health Connector premium subsidies to replace expiring tax credits; providing $180 million to lower residents’ winter utility bills; and using $25 million to help middle-income, first-time homebuyers.
There are two new tax credits proposed in the budget. A credit for farmers who donate to food pantries is a good idea to help local farmers while addressing hunger. A credit for airlines to transition to sustainable aviation fuels may address the state’s climate goals but raises the question of whether, in a tight budget, the state should spend $10 million annually for a three-year pilot to help airlines.
The budget bill also counts on the Legislature passing a bill Healey recently introduced to phase in at a state level several tax changes included in the federal One Big Beautiful Bill Act, generally related to business taxes.
The budget is a reasonable starting point for the Legislature, which will now develop its own proposals.
This editorial board has repeatedly stressed the importance of curbing the growth in health care costs, which impact not only individual budgets but also the state budget. Of the $63 billion budget, around $22.5 billion would go toward MassHealth, with another $10.8 billion for other Health and Human Services spending. Those figures don’t include the Group Insurance Commission (which provides health insurance to state employees) or contracts for state prisoners’ health care.
It is important to recognize, though, that even small health care cuts — while necessary — affect lives. Under Healey’s budget, MassHealth would eliminate coverage of GLP-1 drugs for weight loss, cap dental benefits around $1,000 annually, keep provider reimbursements flat, and convene groups to determine how to lower costs in areas like adult day health programs, where costs have spiked. The Group Insurance Commission is also figuring out how to save $120 million next fiscal year, considering options like eliminating GLP-1 coverage for weight loss and increasing urgent care copays.
Healey’s budget generally would continue programs implemented in previous years — funding free community college, providing universal school meals, hiring more public defenders, phasing in the sixth and final year of a modernized education funding formula, and expanding early literacy tutoring. It would continue providing grants to child-care providers but would not have money to unfreeze a waitlist for low-income children seeking subsidies. Aid to cities and towns — including both government and education aid — would increase by 4.4 percent. The budget contains a few new programs, including money to help struggling schools boost achievement and to accelerate municipal bridge repairs.
There are also a limited number of proposed policy changes, which deserve legislative scrutiny, like having the Department of Transportation establish a speed camera enforcement program.
Several fiscal decisions that Healey made reflect the challenging year. The surtax on income over $1 million was initially billed as extra revenue for education and transportation to help with one-time and capital projects. But in fiscal 2027, Healey is proposing spending $3.85 billion in Fair Share revenue, with some of it going to fund programs that are essentially ongoing operating costs — $550.6 million for the school funding formula and $470 million to stabilize the MBTA operating budget. The budget relies on withdrawing money from some education-related trust funds, anticipating more money will flow into them by the end of the year.
Looking ahead, the House, which releases its budget in April, should approach next year’s budget with a sense of fiscal responsibility, avoiding gimmicks, earmarks, and splashy new programs to fund a budget that meets the needs of residents in a financially challenging time.
Editorials represent the views of the Boston Globe Editorial Board. Follow us @GlobeOpinion.