Legislature Passes Fiscal Year 2025 Budget

Stephen Acosta

$58B budget agreement provides for significant levels of investment in education, regional equity, and transportation 

(BOSTON–7/19/24) Today, the Legislature enacted a $58 billion budget for Fiscal Year 2025 (FY25), resolving differences between the versions of the budget passed by the House of Representatives and the Senate earlier this year. The FY25 conference committee report maintains fiscal responsibility while delivering historic levels of investment in every level of education, transportation regional equity, workforce development and health care, reflecting the Legislature’s ongoing commitment to delivering on affordability for residents and economic competitiveness for the Commonwealth. 

“The Commonwealth’s budget for Fiscal Year 2025 agreed to by the Legislature today provides for a high level of quality for the programs that our municipalities and residents rely on,” said Senator Cindy F. Friedman (D-Arlington), Vice Chair of the Senate Committee on Ways and Means. “This is a budget that balances fiscal constraints with targeted, impactful investments that ensure statewide stability and regional equity. As we grapple with rising costs and access challenges within the Massachusetts health care system, I am especially proud that this budget utilizes tools to maximize our health care dollars for the facilities and providers that serve our most vulnerable residents. I am excited by this robust final budget that will benefit all of Massachusetts and bring significant funding for local projects in the 4th Middlesex district.” 

The FY25 budget recommends a total of $58 billion in spending, a $2 billion increase over the Fiscal Year 2024 (FY24) General Appropriations Act (GAA). This spending recommendation is based on a tax revenue estimate of $41.5 billion for FY25, which is $208 million less than revenues assumed in the FY24 GAA. This represents nearly flat growth, as agreed upon during the consensus revenue process in January, plus $1.3 billion in revenue generated from the Fair Share surtax. 

As the Commonwealth adjusts to a changing economic landscape and ongoing tax revenue volatility, the FY25 budget adheres to disciplined and responsible fiscal stewardship. It does not raise taxes, nor does it draw down available reserves from the stabilization fund or the transitional escrow fund, while at the same time judicially utilizing one-time resources to maintain balance. The FY25 budget continues responsible and sustainable fiscal planning for the future by continuing to grow the Rainy Day Fund, already at a historic high of over $8 billion, to an anticipated balance of roughly $9 billion at the close of FY25. 

Community Support and Local Aid 

The FY25 budget further demonstrates the Legislature’s commitment to dedicating meaningful resources that touch all regions and meet the needs of communities across the Commonwealth. This includes $1.3 billion in funding for Unrestricted General Government Aid (UGGA), an increase of $38 million over FY24, to support additional resources for cities and towns.  

Local Funding Highlights — 4th Middlesex District 

4th Middlesex Chapter 70 education funding breakdown (Total: $92,787,709) 

  • Arlington – $19,329,593 
  • Billerica – $20,582,134 
  • Burlington – $9,975,106 
  • Lexington – $18,321,635 
  • Woburn – $14,729,389 
  • Minuteman High School – $3,046,779 
  • Shawsheen Valley Technical – $6,803,073 

  

4th Middlesex UGGA breakdown (Total: $28,995,119) 

  • Arlington – $9,341,579 
  • Billerica – $7,170,082 
  • Burlington – $3,224,636 
  • Lexington – $1,887,088 
  • Woburn – $7,371,734 

4th Middlesex Local Project Funding (Total $2,910,000)  

  • $1,500,000 for the continuation of the Middlesex County Restoration Center pilot program; 
  • $500,000 for the establishment of a psychiatry residency training program at Lahey Hospital in Burlington; 
  • $137,500 for Arlington Youth Counseling Center Inc. to provide youth mental health support in Arlington; 
  • $120,000 for English At Large, Inc. for English language tutoring and small group instruction in Woburn; 
  • $105,000 for Social Capital Inc. for youth leadership and civic engaging programming, and migrant support and health equity work in the city of Woburn; 
  • $100,000 for Food Link, Inc. to address food security in Arlington, Billerica, Burlington, Lexington, and Woburn; 
  • $100,000 for Boys and Girls Club of Woburn, Inc. for transportation and capital needs in Woburn: 
  • $75,000 for the Burlington Council on Aging for the salary of a full-time social worker in Burlington; 
  • $75,000 for the Woburn Senior Center for transportation and capital needs in Woburn; 
  • $50,000 for the Parallel Park in Arlington; 
  • $50,000 for the Arlington Chamber of Commerce in Arlington; 
  • $37,500 for LexSeeHer, Inc. for the construction, installation, and community education of the Lexington Women’s Monument in Lexington; 
  • $25,000 for the purchase and installation of dishwashers at Harrington Elementary School and Fiske Elementary School in Lexington; 
  • $20,000 for Special Needs Arts Programs, Inc. to help the organization serve existing and waitlisted clients in Lexington; and 
  • $15,000 for the Arlington Community Orchard in Arlington. 

In addition to traditional sources of local aid, the FY25 budget includes the following local and regional equity investments: 

  • $204 million for Regional Transit Authorities (RTAs) to support regional public transportation systems, including $110 million from Fair Share funds to support our RTAs that help to connect all regions of our Commonwealth. 
  • $53 million for payments in lieu of taxes (PILOT) for state-owned land, an increase of $1.5 million over FY24. PILOT funding is an additional source of supplemental local aid for cities and towns working to protect and improve access to essential services and programs during recovery from the pandemic.  
  • $52.4 million for libraries, including $19 million for regional library local aid, $20 million for municipal libraries and $6.2 million for technology and automated resource networks. 
  • $26.9 million for the Massachusetts Cultural Council to support local arts, culture, and creative economic initiatives. 

Fair Share Investments to Grow Our Economy 

Consistent with the consensus revenue agreement reached with the Healey-Driscoll Administration in January, the FY25 budget includes $1.3 billion in revenues generated from the Fair Share surtax of four percent on annual income above $1 million and invests these public dollars to improve the state’s education and transportation sectors.  

Notable Fair Share education and transportation investment highlights include: 

Education: 59% of Fair Share Revenues 

  • $170 million to fully fund universal free school meals programming for every public-school student in the Commonwealth.  
  • $175 million for the Commonwealth Cares for Children (C3) program to provide monthly grants to early education and care programs, which is matched with $300 million in funds from the new Early Education and Care Operational Grant Fund and the High-Quality Early Education and Care Affordability Fund for a total investment of $475 million.  
  • $117.5 million for MassEducate to provide free community college across the Commonwealth.  
  • $80 million to expand financial aid programs for in-state students attending state universities through MASSGrant Plus, which is in addition to the $175.9 million for scholarships funded through the General Fund. 
  • $65 million for early education and care provider rate increases, to increase salaries for our early educators. 
  • $20 million for early literacy initiatives. 
  • $14 million for grants to State Universities to provide wraparound supports and services. 
  • $5 million for the CPPI Pre-K Initiative, matching $17.5 million in funds from the general fund, for a total of $22.5 million to support the expansion of universal pre-kindergarten, including in Gateway Cities. 

Transportation: 41% of Fair Share Revenues 

  • $250 million for the Commonwealth Transportation Fund (CTF), which will leverage additional borrowing capacity of the CTF and increase investments in transportation infrastructure by $1.1 billion over the next 5 years. This $250 million includes:  
  • $127 million to double operating support for the MBTA.  
  • $63 million in debt service to leverage additional borrowing capacity.  
  • $60 million in operating support for MassDOT.  
  • $60 million for MBTA capital investments, including $10 million for resilient rail services.  
  • $36 million for the MBTA workforce safety reserve. 
  • $10 million for the MBTA Academy. 
  • $45 million for roads and bridges supplemental aid for cities and towns. 
  • $110 million for regional transit funding and grants to support the work of Regional Transit Authorities (RTAs) that serve the Commonwealth, which together with general fund spending funds RTA operations at $204 million.  Fair Share funding includes:  
  • $66 million in direct operating support for Regional Transit Authorities.  
  • $30 million for systemwide implementation of fare-free transit service.  
  • $10 million to incentivize connections between regional transit routes.  
  • $4 million to support expanded mobility options for the elderly and people with disabilities.  
  • $20 million to support implementation of a low-income fare relief program at the MBTA.   
  • $7.5 million for water transportation funding and operational assistance for ferry services.   

Education: Early Education and Care, K-12 and Higher Education 

The FY25 budget supports students across the full spectrum of the Commonwealth’s education system, shaping polices to make high-quality education more accessible and by making significant investments in the education system, from our youngest learners to adults. 

To create a new funding source for EEC initiatives, the budget allows the Massachusetts Lottery to sell its products online. A portion of the new revenue collected from online lottery sales, estimated to be $100 million in FY25, would fund C3 grants, which provide long-term stability for high-quality and affordable care for families. 

The budget report delivers significant levels of investment in education, including: 

  • $6.9 billion in Chapter 70 funding, an increase of $317 million over FY24, as well as increasing minimum Chapter 70 aid from $30 to $104 per pupil, delivering an additional $37 million in resources to school districts across the state. 
  • Over $1.55 billion investment in the early education and care sector, including: 
  • $475 million for the Commonwealth Cares for Children (C3) grants. 
  • FY25 is the second fiscal year in a row which the annual state budget includes a full year of funding for C3 grants, signaling a historic commitment to maintain this crucial lifeline for our early education and care sector.  
  • The FY25 budget also makes the C3 program permanent, while including provisions to direct more funds from the C3 program to early education and programs that serve children receiving childcare subsidies from the state and youth with high needs. 
  • $117.5 million for free community college across the Commonwealth, covering tuition and fees for students. 
  • $493.2 million for the special education (SPED) circuit breaker. 
  • $99.5 million to reimburse school districts for regional school transportation costs, representing an 85 per cent reimbursement rate. 
  • $18.5 million for Head Start grants. 
  • $16 million for rural school aid assistance. 
  • $6 million for Social Emotional Learning Grants to help K-12 schools continue to bolster social emotional learning supports for students, including $1 million to provide mental health screenings for K-12 students. 
  • $5 million for grants to support implementation of the Massachusetts Inclusive Concurrent Higher Education law, including $3 million for grants offered through the Massachusetts Inclusive Concurrent Enrollment initiative to help high school students with intellectual disabilities ages 18–22 access higher education opportunities; and $2 million for the Massachusetts Inclusive Concurrent Enrollment Trust Fund. 
  • $3 million for genocide education grants to facilitate teaching students the history of genocide. 
  • $1 million for hate crimes prevention grants to support the prevention of hate crimes in public schools.  

The FY25 budget codifies several provisions that transforms the early education sector by improving affordability and access for families, increasing pay for early educators, and ensuring the sustainability and quality of early education and care programs.  

In K-12 education, the FY25 budget follows through on the Legislature’s commitment to fully fund and implement the Student Opportunity Act (SOA) by Fiscal Year 2027, investing $6.9 billion in Chapter 70 funding, an increase of $319 million over FY24, as well as increasing minimum Chapter 70 aid from $30 to $104 per pupil, delivering an additional $37 million in resources to school districts across the state. With these investments, the Legislatures continues to provide crucial support to school districts confronting the increasing cost pressures that come with delivering high-quality education to all students. 

In addition to the record levels of investment in early education and K-12, the FY25 budget removes barriers to accessing public higher education by codifying into law MassEducate, a $117.5 million investment in universal free community college program that covers tuition and fees for residents, aimed at supporting economic opportunity, workforce development, and opening the door to higher education for people who may never have had access. The FY25 budget permanently enshrines free community college into law in an affordable and sustainable manner across the Commonwealth, while leaving no federal dollars on the table. 

Health, Mental Health and Family Care 

Investments in the FY25 budget allow more than two million people to receive continued access to affordable and comprehensive health care services. Health care investments include: 

  • $20.36 billion for MassHealth, representing the largest investment made in the state budget. 
  • $2.9 billion for a range of services and focused supports for people with intellectual and developmental disabilities. 
  • $622.4 million for Department of Mental Health (DMH) adult support services. 
  • $625 million for nursing facility Medicaid rates, including $40 million in additional base rate payments to maintain competitive wages in the Commonwealth’s nursing facility workforce. 
  • $390 million for Chapter 257 rates to support direct-care providers across the continuum of care. 
  • $212.7 million for a complete range of substance use disorder treatment and intervention services. 
  • $131.4 million for children’s mental health services. 
  • $33.8 million for Family Resource Centers to grow and improve the mental health resources and programming available to families. 
  • $30.9 million for Early Intervention services, ensuring supports remain accessible and available to infants and young toddlers with developmental delays and disabilities. 
  • $29.6 million for grants to local Councils on Aging to increase assistance per elder to $15 from $14 in FY 2024. 
  • $27.9 million for family and adolescent health, including $9.2 million for comprehensive family planning services and $6.7 million to enhance federal Title X family planning funding. 
  • $20 million to recapitalize the Behavioral Health, Access, Outreach and Support Trust Fund to support targeted behavioral health initiatives. 
  • $14.7 million for maternal and child health, including $10.4 million for pediatric palliative care services for terminally ill children and a policy adjustment to ensure that children up to age 22 can continue to be served through the program.  
  • $5.5 million for Children Advocacy Centers to provide critical supports available to children that have been neglected or sexually abused. 
  • $2 million for grants for improvements in reproductive health access, infrastructure, and safety. 

The FY25 budget, for the first time in Massachusetts’ history, allows an individual to be identified with a non-binary ‘X’ sex designation on their birth certificate and enshrine into law the current practice of allowing an individual to select a non-binary ‘X’ gender designation on their driver’s license. This step ensures that all residents—including trans and nonbinary people—can secure government documents that accurately reflect who they are.  

Additionally, the FY25 budget recognizes that the cost of fertility preservation should not be a barrier to starting a family for Massachusetts residents with cancer or other serious medical conditions. It therefore requires health insurance carriers to cover fertility preservation treatments for individuals who have a medical diagnosis or who are going through medical treatments that may impact fertility. It also includes coverage for the procurement, cryopreservation, and storage of gametes, embryos, or other reproductive tissue. 

The FY25 budget also directs a report on the implementation of ongoing and proposed initiatives to promote equitable salaries and equitable rates in the human service field, drawing language substantially from a bill Senator Friedman filed, S.84, An Act relative to a livable wage for human service workers. S.84 would address disparities between the rate of pay for human services workers employed directly by the state as well as human service workers employed by agencies receiving state contracts. The report included in the budget looks at the salaries and rates for human service workers, direct care workers, nurses, clinicians and other comparable employees employed by state-operated providers.

Housing 

The FY25 budget invests $1.15 billion in housing, dedicating resources for housing stability, residential assistance, emergency shelter services, and homelessness assistance programs, ensuring the state deploys a humane, responsible, and sustainable approach to providing families and individuals in need with an access point to secure housing. 

The budget prioritizes relief for families and individuals who continue to face challenges brought on by the pandemic and financial insecurity, including $326.1million for Emergency Assistance Family Shelters, in addition to the $175 million in resources passed in the recent supplemental budget, to place the Commonwealth’s shelter system on a fiscal glidepath into FY25. Housing investments include: 

  

  • $231.7 million for the Massachusetts Rental Voucher Program (MRVP), including $12.5 million in funds carried forward from FY24.   
  • $197.4 million for Residential Assistance for Families in Transition (RAFT). 
  • $113 million for assistance to local housing authorities.  
  • $110.8 million for assistance for individuals experiencing homelessness. 
  • $57.3 million for the HomeBASE program. 
  • $27 million for the Alternative Housing Voucher Program (AHVP), including $10.7 million in funds carried forward from FY24, to provide rental assistance to people with disabilities.  
  • $10.5 million for assistance for unaccompanied homeless youth.  
  • $10.5 million for Housing Consumer Education Centers (HCECs). 
  • $8.9 million for sponsor-based supportive permanent housing. 
  • $8.9 million for the Home and Healthy for Good re-housing and supportive services program, including funding to support homeless LGBTQ+ youth. 

The FY25 budget includes important consumer protections, including ending the practice of home equity theft, a practice where cities, towns, and even private companies can foreclose on a home for taxes owed, sell it, and pocket the profits. With this crucial step, the Legislature strikes a balance to ensure equity is returned to homeowners and taxpayers, while municipalities will be made a whole and protected moving forward.  

Expanding and Protecting Economic Opportunities 

The budget includes a record investment in the annual child’s clothing allowance, providing $500 per child for eligible families to buy clothes for the upcoming school year. The budget also includes a 10 per cent increase to Transitional Aid to Families with Dependent Children (TAFDC) and Emergency Aid to the Elderly, Disabled and Children (EAEDC) benefit levels compared to June 2024. Other economic opportunity investments include: 

  

  • $496.2 million for Transitional Assistance to Families with Dependent Children (TAFDC) and $183.2 million for Emergency Aid to Elderly, Disabled and Children (EAEDC) to provide the necessary support as caseloads increase, and continue the Deep Poverty increases. 
  • $59.8 million for adult basic education services to improve access to skills necessary to join the workforce. 
  • $42.4 million for the Massachusetts Emergency Food Assistance Program. 
  • $15 million in Healthy Incentives Programs to maintain access to healthy food options for households in need. 
  • $10.4 million for Career Technical Institutes to increase our skilled worker population and provide residents access to career technical training opportunities. 
  • $10 million for the Workforce Competitiveness Trust Fund to connect unemployed and under-employed workers with higher paying jobs. 
  • $10 million for a community empowerment and reinvestment grant program to provide economic support to communities disproportionately impacted by the criminal justice system. 
  • $5.4 million for the Innovation Pathways program to continue to connect students to training and post-secondary opportunities in STEM fields. 

Having passed the House of Representatives and the Senate, the FY25 budget now moves to the Governor’s desk for her consideration.   

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