Massachusetts Senate Democrats rolled out a $61 billion spending plan for fiscal year 2026 that increases spending by 6.3% over last year’s state budget and rejects a series of tax increases that Gov. Maura Healey pitched in January.
The Senate’s budget writing committee released its proposal Tuesday as Beacon Hill Democrats are still grappling with uncertainty caused by federal funding cuts, efforts to reduce the size of the federal government, and a potential slash to federal spending on Medicaid.
Senate budget chief Michael Rodrigues said lawmakers are putting forward a spending bill “based on the facts that we know today.”
“Everyone I know is concerned about what might change in D.C. over the next few months,” the Westport Democrat said. “We hear a lot of rumors, we hear a lot of threats, we hear proposals, then retractions from proposals. We will move forward and adjust going forward when we know the facts.”
The Senate’s fiscal 2026 budget plan boosts spending by 6.3% over fiscal year 2025 but comes in $647 million lower than the $62 billion proposal Healey put forward earlier this year and over $100 million lower than the budget House Democrats shepherded through their chamber last week.
Rodrigues said costs for MassHealth, the state’s Medicaid program, are surging by $2.3 billion or 11.7% over fiscal year 2025. Other health and human services expenditures are also up by 5.3%, while insurance costs for public employees are spiking by 10.8%.
A vast majority of the spending increases in fiscal year 2026 are “functionally non-discretionary,” Rodrigues said, while all other spending hikes account for only $59 million, or less than 1% of the state budget.
“Unless we want to slash services and programs that we provide to our citizens, there’s very, very little we can do in any of these line items,” Rodrigues said.
But Rodrigues warned that if Congress moves to cut Medicaid funding to states, Massachusetts could find itself in a dire situation.
Congressional Republicans are advancing a budget blueprint that could cut health and human services spending by $880 million, a target experts have said cannot be met without slashing Medicaid funding.
“If they make significant reductions in Medicaid reimbursements, all bets are off, because that is over a billion dollars a month, I think, in MassHealth reimbursements to the Commonwealth of Massachusetts,” he said.
Senate Democrats, like their counterparts in the House, did not include a series of tax increases that Healey wrote into her fiscal year 2026 spending proposal.
The first-term Democrat from Arlington sought to boost overall spending by 7.4% in part by applying the sales tax to candy purchases, imposing the room occupancy excise tax on complimentary hotel rooms, and subjecting synthetic nicotine to the tobacco excise tax.
The governor also pursued a series of pharmaceutical-related tax policies and tried to cap charitable donation tax deductions, though she backed off the latter after some pushback.
“I believe the Senate has met and prioritized fiscal responsibility for Massachusetts in this budget. Our goal is to always be prudent stewards of taxpayer dollars, and at the same time, we invest in our people, our programs, our vulnerable populations, our communities with no new tax dollars,” Senate President Karen Spilka said.
Democratic leadership in the Senate proposed spending in the fiscal year 2026 budget nearly $2 billion in revenue from a surtax on incomes over $1 million by shuttling more than half, or $1.1 billion, to education projects.
That includes $170 million to continue free school meals for students and $120 million to support free community college. Another $600 million is slated for transportation projects.
House lawmakers approved $1.1 billion for education and more than $700 million for transportation, which could set up some debate between the two chambers once budget negotiators enter private talks later this summer.
Senate Democrats also proposed eliminating renter-paid brokers’ fees, a proposal that has drawn support from Gov. Maura Healey and the House.
But Senate leadership backed language from Healey that shifts the burden of the fees to whoever enlists the services of a broker.
The House prohibits tenant-paid brokers’ fees in most instances unless a tenant initiated the contact, received a disclosure, and agreed to certain conditions.
“We think our language accomplishes what we want it to accomplish, that there be no broker fees onto tenants,” Rodrigues said of the Senate’s broker fees proposal.
And like the House, Senate Democrats budgeted $275 million for the emergency assistance shelter system, a $50 million drop from Healey’s budget plan and the previous fiscal year.
Rodrigues said declining caseloads and new restrictions imposed by the Healey administration and the Legislature led to reduced cash for a system that has housed thousands of local and migrant families.
“The EA system was always about more or less 50-50 between long-term residents of the commonwealth and newly arrived residents of the commonwealth. So we think that’s a number that makes sense at this time,” Rodrigues said, adding that he believes $275 million will be enough to cover all fiscal year 2026 expenditures.
Materials from the Associated Press were used in this report.