On January 28th, the Healey-Driscoll administration filed its budget proposal for Fiscal Year (FY) 2027. The $63.36 billion plan increases spending over the FY 2026 General Appropriations Act (GAA) by $2.3 billion (3.8 percent) and over the administration’s estimated spending level for FY 2026 by $668 million (1.1 percent). The Governor’s proposal relies on $404 million in revenues tied to the passage of legislation she filed two weeks prior related to recent federal corporate tax changes.

That tax bill, filed on January 15th, addresses Massachusetts’ conformity with certain tax provisions included in the One Big Beautiful Bill Act (OB3). OB3 contains a myriad of tax changes, some of which extend tax cuts made in the 2017 Tax Cuts and Jobs Act (TCJA), while others restore tax policies that predated the TCJA or address other issues.