Final FY25 Enacted in Legislature

On July 18, 2024, the Legislature enacted the Fiscal Year 2025 (FY25) budget totalling $58.03 billion. It funds investments comprehensively in healthcare, economic development, transportation, housing, education, and more.

The FY25 budget represents a $1.8 billion increase from the FY24 budget. The Commonwealth received $41.5 billion in tax revenue including $.3 billion from the Fair Share surtax. Besides spending, $124.5 million has been allocated towards the state’s stabilization fund (a.k.a. “rainy day fund”) which would total the reserve to approximately $8 billion. 

 Local Aid

The FY25 budget, which includes $6.9 billion towards Chapter 70 education aid, makes significant investments in resources needed by Massachusetts municipalities. This includes $1.3 billion in funding for Unrestricted General Government Aid (UGGA), an increase of roughly $57.82 million over FY24, which cities and towns can use as they see fit.

Along with these traditional funds, the FY25 budget allocates $97.6 million specific for libraries and their technological advancements.

Healthcare

The healthcare portion of the FY25 budget provides for a wide range of public health programs and services. Within the realm of mental health programs, the budget allocated $966.1 million. This sum includes $622.4 million allocated to the Department of Mental Health (DMH). Some more specific programs funded this year include children’s mental health services, which received $131.4 million, and substance abuse prevention programs, which received $212.7 million. 

Maternal and reproductive health received a combined $16.7 million. Maternal health services received $14.7 million which will help improve access and quality of care. Reproductive health services received $2 million within Massachusetts, a state with some of the strongest reproductive health protections in the country.

$20.36 billion, a large portion of the overall budget, was apportioned for MassHealth, the Massachusetts program that combines Medicaid and the Children's Health Insurance Program (CHIP). The budget also provides $625.07 million for nursing facility Medicaid rates. The Commonwealth’s share of the group insurance premium and plan costs for state employees occupied a sizable portion, $2.17 billion, of the healthcare budget this year. ER Diversion initiatives received $1.8 million for the upcoming fiscal year. 

The FY25 budget provides approximately $6 million for social emotional learning grants that provide resources to social and emotional learning programs for school-aged children. $5.5 million was apportioned to Children Advocacy Centers for their work in responding to child abuse and exploitation. Family Resource Centers throughout the Commonwealth received about $33.8 million. The Transitional Aid to Families with Dependent Children, or TAFDC, received $496.23 million to support families, pregnant individuals, and caregivers. The EAEDC, also known as the Emergency Aid to the Elderly Disabled and Children program, received $4 million. Councils on aging provide services to older adults and caregivers within local communities, and they received $29.63 million. The Massachusetts Emergency Food Assistance Program that helps support residents facing food insecurity received $42.4 million.

Economic Development

The FY25 budget also tackles a variety of economic development programs that aim to improve the economic well-being of individuals and communities across the Commonwealth. Career training and educational programs like adult basic education services and career technical institutes received roughly $59.9 million and $10.38 million, respectively. The workforce competitive trust fund, a program that creates training pipelines, received $10 million. The bill also allocates $5.39 million to innovation career pathways programs that train workers for high-demand industries. The budget also included $10.38 million dollars to invest in communities that face historically disproportionate challenges to economic growth through the community empowerment and reinvestment grant programs. 

Education 

The FY25 budget allocates important fiscal resources to a variety of aspects of the public education system in Massachusetts. The budget included a $310 million allotment toward child care provider grants in order to work to address high child care costs. The budget allocates $170 million to the universal free school meal program in elementary and secondary schools. In addition, it provides for $5 million toward early education mental health programs. Green School Works, a program that funds clean energy infrastructure in K-12 public schools, received $10 million. 

The public higher education system received roughly $1.13 million total, with $768.5 million apportioned to the UMass system, and $366.83 million given to remaining state universities. One of the most closely followed figures in this year’s budget process was the amount going toward an expanded program for free community college for all Massachusetts residents, which ended negotiations with an allotted $93.5 million. This has been a priority for the Senate, especially championed by Senate President Karen Spilka (D-Ashland). 

A major win for the House was the allowance for their iLottery program - where the lottery can be played online. This new revenue stream will go to childcare provider grants. The Senate for years has been wary of the iLottery due to its predatory nature and potential public health risks.  

Transportation 

The transportation portion of the bill distributed $447 million to the Massachusetts Bay Transportation Authority (MBTA) ($200 million short of their request), and $721.21 million to the Massachusetts Department of Transportation (DOT) generally. The budget also allocated approximately $52.6 million to infrastructure improvements, including $45 million to roads and bridges and $7.6 million to ferries. The bill also provided around $204 million, some of which originates from Fair Share money,  in funding for Regional Transit Authorities (RTAs) which will allow for fare-free services. 

Housing 

The FY25 budget also addressed various housing programs in the commonwealth. The Massachusetts Rental Voucher Program (MRVP) received $231.7 million, and the Alternative Housing Voucher Program (AHVP) received $27 million. The bill also shelled out $113 million for housing authorities. The HomeBASE and rapid re-housing programs that aim to aid homeless families were given $57.3 million, and emergency assistance family shelters were allocated $326.1 million, notably $6 million less than what Governor Maura Healey (D) has proposed. The Legislature and Governor have been steadfast in their call for federal aid to combat the overcrowding of emergency shelters in the Commonwealth. While they have their arguments, the shelter system is still an issue for Massachusetts to manage. 

While we await Governor Healey’s vetoes and eventual signature, consider subscribing to InstaTrac’s MassTrac software. You will be alerted immediately of any changes customized to you, as well as deep policy analysis. Email info@instatrac.com for more info and to start your free trial!