A $61 billion dollar state budget is set for final votes on Beacon Hill Monday, the day before the new fiscal year dawns, after lawmakers from the House and Senate filed a compromise bill Sunday afternoon.
The deal would set new limits around real estate broker fees and does not raise any state taxes.
It represents a spending increase of almost 6% over this year. Key legislators say their goal is to keep essential state programs humming in the face of economic uncertainty and potential federal cuts.
“The truth is, we started this process with a lot of uncertainty, certainly more questions than answers coming from the federal government,” House budget chief Aaron Michlewitz said. “I think we end this process with still a lot of uncertainty coming from the federal government, but we had to try to get this budget done as quickly as possible, as right as possible, without understanding – not knowing, really, the long term effects of what’s going to happen with Washington.”
House and Senate negotiators say they trimmed almost $500 million in spending from the budgets each chamber passed this spring, and the final bill is almost $1 billion smaller than the version Gov. Maura Healey filed in January.
A summary prepared by the Legislature said the slightly lower bottom line will better prepare the state “to address underlying budget challenges and navigate potential economic turmoil in the months ahead.”
Senate budget chief Michael Rodrigues told GBH News that the deal reduces planned spending “across a sundry of items” in response to concerns from fiscal watchdogs and the Healey administration that next year’s revenue collections might not be as high as initially projected.
Legislative negotiators did not formally lower their revenue estimates and did not revise the projection that Massachusetts will receive $16 billion from the federal government, despite a spending and policy bill pending in Congress that would implement major reductions to Medicaid and other federal programs.
“It is a responsible spend, based on the newest information that we’ve received, providing essential services for the citizens of the Commonwealth,” Rodrigues said.
MassHealth, the Medicaid program here, serves nearly 2 million people and is the single largest account in the Massachusetts budget. The compromise bill funds it at roughly $22 billion, an increase of more than $2 billion over this year.
“We’re going to continue to provide the services that we have,” Michlewitz told GBH News. “We’re going to have challenges related to it. But we’ll have to figure that out as it comes.”
The budget deal also would steer $1 million to a gender-affirming care access program, supporting health centers recently affected by federal funding cuts.
Attorney General Andrea Campbell’s office stands to receive a 12% funding boost over this year. Mariano said in April that equipping Campbell with extra money would allow her team to “continue to push back against any unconstitutional actions taken by the Trump administration.”
Both the House and the Senate included language in their budgets setting new rules around the broker fees charged in apartment rentals, a cost that can exacerbate the already-high cost of housing in the region. Rodrigues said negotiators landed on the Senate version of the measure, which says that the person who hires the broker – typically the landlord – is responsible for paying the fee.
The final budget omits a Senate-backed proposal to give cities and towns more control over issuing liquor licenses, and leaves out a House plan to stall the new, lottery-style admissions set to start this fall at vocational-technical schools so that a study can be done.
Lawmakers said the budget also fully funds the operations of the Pappas Rehabilitation Hospital for Children in Canton and Pocasset Mental Health Center in Bourne. Healey’s initial budget proposal had envisioned shuttering those state-run facilities, but she later put those plans on pause.
The compromise budget acknowledges the economic uncertainty created by President Donald Trump’s trade policies, by launching a study into the possibility of creating a sales-tax exemption on construction materials for apartment-building projects stalled by the tariffs.
Senate President Karen Spilka and House Speaker Ron Mariano said in a joint statement that the compromise budget “delivers for Massachusetts residents and reflects our shared commitment to spending taxpayer dollars responsibly.”
“As President Trump and Congressional Republicans continue to pursue devastating cuts to programs that millions of Americans rely on, we recognize the heightened importance of passing a fiscally responsible budget that invests in the areas that we value most,” the two Democratic leaders said. “This budget does exactly that.”
Successful votes in the House and Senate on Monday would make this the first time since 2016 that lawmakers have finalized a budget by the July 1 start of the fiscal year.
Healey will still get 10 days to review the spending plan before signing it and handing down any vetoes or amendments. Healey last week filed a temporary budget to keep state government funded while she pores over the full bill.
