Despite record spending growth, Governor’s proposal leaves cities and towns squeezed and taxpayers facing higher property taxes

In response to the release of Governor Maura Healey’s fiscal year 2027 budget, the Massachusetts Fiscal Alliance warned that Beacon Hill continues to prioritize headline spending announcements over the real fiscal pressures facing local communities and working families.

The Governor’s proposal is a record setting $63.3 billion budget that would increase state spending by 3.8 percent over last year. At the same time, revenues are projected to grow by just 2.9 percent, widening the gap between what the state is spending and what taxpayers can realistically afford.

This latest proposal also builds on a state budget that has grown by more than 50 percent since 2018, far outpacing inflation and household income growth across Massachusetts.

While the administration is touting a minor increase in local aid accounts, unrestricted general government aid, the funding municipalities rely on to pay for core services, remains severely underfunded and disconnected from the realities cities and towns face.

Under the governor’s proposal, unrestricted general government aid would increase by just 2.5 percent, an amount that barely keeps pace with inflation and falls far short of what local officials say is needed to avoid property tax overrides and service cuts. A recent study from the Massachusetts Municipal Association pointed out that in real terms, local aid had declined 25% since 2010, a fact greatly contributing to municipal budgetary woes.

“At a time when state spending has exploded year after year, cities and towns are being told to make do with crumbs. Beacon Hill is spending more money than ever before, yet local leaders are still being forced to consider overrides just to keep basic services running,” said Paul Diego Craney, Executive Director of the Massachusetts Fiscal Alliance.

Since Governor Healey took office, the state budget has grown dramatically, far outpacing inflation and household income growth and leaving taxpayers struggling to keep up with rising costs for energy, housing, health care, and property taxes.

Despite this spending surge, unrestricted local aid continues to lag behind, pushing financial pressure downward onto municipalities and ultimately onto homeowners and renters.

“This is the same pattern we see every year. The administration celebrates record spending while families are falling further behind and local governments are left holding the bag. When unrestricted aid is shortchanged, the bill does not disappear. It shows up in higher property taxes,” noted Craney.

Municipal leaders have repeatedly warned that inadequate general local aid forces communities into an unsustainable cycle of overrides, fee increases, and deferred maintenance, making many towns less affordable for working families and seniors on fixed incomes.

“Governor Healey talks about affordability, but her budgets continue to ignore one of the biggest drivers of it. If Beacon Hill is serious about helping residents stay in their communities, it needs to prioritize local aid and start reining in runaway state spending,” noted Craney.

The Massachusetts Fiscal Alliance urged lawmakers to use the upcoming budget process to restore fiscal discipline, prioritize unrestricted local aid, restore the state’s ever declining economic competitiveness, and realign state government with the economic realities facing taxpayers.

“Massachusetts does not have a revenue problem. It has a spending problem. Until leaders confront that, families and communities will continue to pay the price,” closed Craney.