Massachusetts’s current budget

Governor Maura Healey released her FY 2026 budget proposal and gave the state of state address in January 2025. The FY 2026 budget was enacted in July 2025.

Massachusetts enacted its FY 2025 budget in July 2024. The budget reported $57.7 billion in general fund spending, an increase of 1 percent over the previously enacted budget. (The NASBO data cited below is a different measure of general expenditures.) Massachusetts approved a surtax on incomes over $1 million in 2022.

Under the American Rescue Plan, Massachusetts received $5.3 billion in direct state fiscal aid and $3 billion in local government aid from the federal government. As of January 2025, Massachusetts had fully allocated its state ARP. States must spend the funds by Dec. 31, 2026.

According to the National Association of State Budget Officers (NASBO), Massachusetts’s total expenditures in fiscal year FY 2025 were $81.0 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2025 were $2.9 trillion, ranging from $5.4 billion in Wyoming to $413.8 billion in California.

According to NASBO, Massachusetts’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

• FY 2025: $40.2 billion/$89.2 billion
• FY 2024: $35.7 billion/$83.7 billion
• FY 2023: $34.3 billion/$81.0 billion
• FY 2022: $32.4 billion/$74.0 billion
• FY 2021: $30.6 billion/$67.2 billion
• FY 2020: $29.5 billion/$63.1 billion
• FY 2019: $28.6 billion/$59.8 billion

For more on Massachusetts’s budget, see

• the Massachusetts Executive Office for Administration and Finance and
  
• the Comptroller of the Commonwealth of Massachusetts.

Massachusetts’s budget institutions, rules, and constraints

Massachusetts uses an annual budget. The legislature must pass and the governor must sign a balanced budget, but a deficit can be carried over into the following year. Massachusetts further limits revenue growth, but the limit may be overridden by a simple legislative majority. There are also limits on total authorized debt and debt service incurred by the state.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Overview of Massachusetts’s state and local expenditure and revenue sources

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Massachusetts’s combined state and local direct general expenditures were $99.6 billion in FY 2022 (the most recent year census data were available), or $14,268 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $12,083.

Massachusetts’s largest spending areas per capita were public welfare ($4,582) and elementary and secondary education ($2,903). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Massachusetts’s combined state and local general revenues were $111.6 billion in FY 2022, or $15,986 per capita. National per capita general revenues were $13,619. Massachusetts uses all major state and local taxes. After federal transfers, Massachusetts’s largest sources of per capita revenue were individual income taxes ($3,494) and property taxes ($2,998).

Massachusetts’s economic trends

Massachusetts’s per capita income (per the Bureau of Economic Analysis) was $93,927 in 2024, ranking first among the states. It was above both the national average of $72,425 and the New England regional average of $82,021. The state’s median household income (five-year estimate) was $103,960 in 2024, ranking first among the states and above the national average of $80,734. Massachusetts’s poverty rate was 10 percent in 2024 (five-year estimate), below the national rate of 12.5 percent.

Although Massachusetts’s averages tell a story about the entire state, Massachusetts is composed of diverse localities. For example, the city of Springfield’s median household income was $52,656, and its poverty rate was 25.8 percent; the city of Wellesley’s median household income was $250,001, and its poverty rate was 4 percent.

Massachusetts’s unemployment rate has historically been below the national average.

Unemployment rates (like other economic indicators) often vary significantly by race and ethnicity. In Massachusetts, the average unemployment rate in 2024 was 3.8 percent for white residents, 6.3 percent for Black residents, and 5.1 percent for Hispanic or Latino residents.

The major industries that contributed the most to Massachusetts’s gross domestic product (GDP) in 2024 were finance, professional services, social services (i.e. health and education), government, and manufacturing. Professional services and social services contributed more to Massachusetts’s GDP than they did to the nation’s and region’s GDP, while government and manufacturing were less important to Massachusetts than they were to the nation and region in 2024.

Looking at more specific industries, among those that accounted for at least 1 percent of Massachusetts’s GDP in 2023, miscellaneous professional, scientific, and technical services produced far more for the state than for the nation, contributing 10.2 percent to Massachusetts’s GDP and 4.9 percent to the nation’s. Other industries that overperformed in Massachusetts relative to national averages in 2023 were education, publishing, hospitals, and securities and commodity contracts.

Massachusetts’s politics

Governor Maura Healey, a Democrat, was elected in 2022 with 64 percent of the vote. The next gubernatorial election is in 2026.

Democrats control both the House of Representatives (132 Democrats to 24 Republicans and 1 independent) and Senate (36 Democrats to 4 Republicans), with veto-proof majorities in both houses. Control of the governor’s mansion and each house of the legislature gives Democrats a trifecta in Massachusetts. The entire legislature is up for election in 2026 because both representatives and senators serve two-year terms.

Massachusetts’s demographics

As of July 2024, Massachusetts’s population was 7,136,171. That was up 8.8 percent from 2010. The state’s population growth rate was slower than than the nation’s 9.9 percent growth over the same period. The Urban Institute estimates the state’s population will increase 6.7 percent between 2010 and 2030, less than the nation’s estimated growth rate of 16 percent.

Additional resources

• The State and Local Finance Initiative’s Backgrounders explain the tax and spending issues highlighted in these briefs.
  
• The State Economic Monitor presents updated data and customized visualizations of state economic indicators.
  
• State and Local Finance Data: Exploring the Census of Governments allow users to sort, customize, and download the Census of Governments State and Local Finance series data featured in these summaries.
  
• The State Tax and Economic Review series provides quarterly reports on state tax collections and underlying economic trends in all 50 states.
  
• The Urban Institute’s State Tax Data Subscriptions provide access to up-to-date revenue data in all 50 states.