BOSTON (WWLP) – Just minutes before the fiscal year 2026 budget-writing process began on Mond, lawmakers sent their fiscal year 2024 closeout bill to Governor Healey’s desk.
Through this bill, House and Senate Democrats decided to redirect more than half a billion dollars–to close a budget gap and fund additional spending–that would usually be sent to the state’s long-term savings account.
This budget gap was caused primarily by lower-than-expected tax collections from non-income surtaxes.
Usually, tax revenue above a certain threshold is split up with 90% headed to the long-term savings fund, 5% going to pension, and 5% for other post-retirement benefits.
The bill makes the one-time promise to send 85% of the excess tax revenue to the general fund to address the budget gap and send just 5% to long-term savings.
Pensions and other post-retirement benefits will continue to receive 5% of the excess each.
According to a Ways and Means insider, this closeout budget has a $701.2 million dollar bottom line and will have a price tag of $133.6 million dollars to the state. It allows for extra spending in several areas, including free school lunches and start-up costs for the online lottery, but a majority of the money will be set aside for MassHealth.