The MA House of Representatives and the MA Senate have now each advanced their own version of the FY26 state spending plan, endorsing competing proposals with a roughly $61.4 billion price tag.  A conference committee comprised of three members from each branch must now hash out the differences between the two bills and present a compromise budget to their respective branches for final adoption.

 

RAM applauded the House for their rejection of Governor Maura Healey’s proposed slate of tax increases.  Gov. Healey had sought to remove the sales tax exemption on candy and confectionary products, making them subject to the 6.25% sales tax.  She had also proposed taxing synthetic nicotine products at 210% of the wholesale cost, and proposed a “pharmacy assessment,” or a $2 per prescription tax on all scripts filled in the state.  The House rejected all of these tax increase provisions, which were then off the table for possible consideration in the Senate. 

 

During budget debate in the House, legislators did add an amendment of interest to employers, proposing to create the Secure Choice Retirement Savings Program.  The Secure Choice amendment mandates that employers with more than 25 employees, and who are not offering a retirement savings program, must establish a payroll deposit savings program to be developed by the state.  The program would be administered by the State Treasurer and is modeled on programs found in eight other states.  The Senate did not include this provision in its budget bill so the fate of the matter now lies in the hands of the Conference Committee.

 

The budget proposed by Gov. Healey in January proposed to spend 7.4% more than the FY25 budget adopted last summer, while the House and Senate budgets would raise state spending by 6% over FY25.  The state is anxiously following the ongoing budget and tax discussions in Washington, D.C., where decisions made there on federal funding to the states would have significant impacts on the state budget.

 

The same set of conferees working on the state budget have also been assigned to negotiate a final resolution on a $1.3 billion supplemental budget that spends surplus surtax funds.  The surtax, or “Millionaire’s Tax” funds, come from the Fair Share Amendment adopted by the voters in 2022 which adds an additional 4% tax on income above about $1 million annually.  Surtax spending is limited to the areas of transportation and education.

 

The first day of Fiscal Year 2026 is July 1.