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Healey signs $56 billion state budget more than a month into fiscal year

On Wednesday, Governor Maura Healey signed into law the annual budget. The $56 billion budget includes hundreds of millions into the MBTA and covers community college tuition for many.Jonathan Wiggs/Globe Staff

Wielding a light veto pen, Governor Maura Healey on Wednesday signed into law a $56 billion state budget that will cover community college tuition for a swath of students, pour hundreds of millions more dollars into the MBTA, and make Massachusetts the eighth state to cover lunch costs for all children in public schools.

With the signing of the annual budget, Healey’s first since taking office in January, Massachusetts became one of the last states in the country to approve a spending plan for the fiscal year that began 39 days ago. It will hike spending by 7 percent over last fiscal year, and for the first time, distribute at least $1 billion in revenue raised from a new tax on the state’s wealthiest residents.

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“Policy-making takes time,” Healey said at a State House news conference alongside Democratic legislative leaders. “This is a budget that got it right.”

Healey’s action will also unlock a host of policy changes. The law includes a program that makes undocumented high schoolers eligible for in-state tuition rates at public colleges or universities in Massachusetts, and another that establishes universal free school meals in public schools using state dollars, making Massachusetts the eighth state in the nation to embrace such a program.

It also adds two seats to the MBTA Board of Directors, including for the first time an appointee by Boston Mayor Michelle Wu, and requires the state’s chief medical examiner to personally review and approve all autopsies of children younger than 2 — codifying a measure that had been stripped amid budget negotiations a year ago.

The law sets aside $38 million to cover tuition at community college programs for most students aged 25 or older and for students pursuing degrees in nursing starting this fall. It also dedicates $475 million to Commonwealth Cares for Children, or C3 grants, the first time the state has fully funded the grants for early education and child-care providers without help from the federal government.

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Healey made few revisions to the hulking plan. She vetoed more than $200 million in spending, spreading the cuts across a variety of line items. She also vetoed an outside section that would have authorized the state to use the same amount in one-time funding from an escrow account.

She also sent lawmakers back a provision that would make phone calls free for those who are incarcerated in state prisons and jails, saying she supports the concept but wants to delay its implementation by five months to Dec. 1.

Healey, who pushed a more limited proposal as part of her budget, wrote in a letter to lawmakers that pushing the date out avoids the need to make retroactive reimbursements, and gives the Department of Correction and local sheriffs time to “manage vendor contracts more effectively” to absorb the added costs. (The budget also includes $20 million for the new no-cost calls program.)

Advocates who have for years pushed to make calls free for those incarcerated and their families said they understood Healey’s appeal for more time and were optimistic the provision would ultimately make it into law. The Legislature had passed similar language a year ago, but it failed after Healey’s predecessor, Charlie Baker, also returned it with an amendment late in the legislative session.

“A lot of us have PTSD from that, but this is very different,” said Bonnie Tenneriello, senior attorney at Prisoners’ Legal Services of Massachusetts, noting Healey — unlike Baker — vocally supports the concept. “We’re nowhere near” last year’s situation, she said.

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Healey also cut funding for Head Start grants by $1 million, a move that Michelle Haimowitz, the Massachusetts Head Start Association executive director, said leaves the early learning grant program in the lurch. The program, which serves low-income pregnant women and children under 5, receives a mix of state and federal funding to operate.

”Today’s reduction undermines the important work that has begun to properly value and respect the educators serving our youngest learners and would directly hit the wallets of those who are most deserving of more,” Haimowitz said in a statement.

The spending plan is also the first to begin spending $1 billion in projected revenue from the so-called millionaires tax voters approved last fall. The budget lawmakers passed sought to allocate roughly $522 million for education and $477 million for transportation, including $205 million for the MBTA.

Healey, an Arlington Democrat, proposed different contours for spending revenue raised by the surtax on annual income over $1 million. But she left the Democrat-led Legislature’s plan in place, which includes $20 million for a MBTA workforce and safety reserve.

The state has been operating on its second interim spending plan while the budget was in limbo. The Legislature did not reach and pass an agreement until the final day of July, making this year its tardiest performance in delivering a plan in more than two decades — excluding the chaotic first year of the COVID pandemic.

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Before Wednesday, Massachusetts was one of just three states, alongside North Carolina and Oregon, that had yet to finalize a fiscal year 2024 budget, according to the National Conference of State Legislatures.

Notably absent amid Wednesday’s celebratory bill signing were updates on potential tax relief. The budget sets aside about $580 million for a future tax code overhaul, though a concrete plan remains tied up in closed-door negotiations among House and Senate leaders with little clarity on when an agreement could emerge.

Senate President Karen E. Spilka argued that the budget itself will also help families while talks continue. “So much of what’s in the budget is a form of relief for individuals and working families,” the Ashland Democrat said.

Other uncertainty hangs over the state’s finances. The Healey administration has yet to release a complete picture of the state’s tax revenue for the fiscal year that ended June 30. The Department of Revenue had said in early June that tax collections then were still lagging the state’s year-to-date projections by at least $583 million.

That raised the prospect the state could be facing an end-of-year budget gap at a time when many other states were enjoying surpluses, according to the National Association of State Budget Officers.

Georgia, for example, finished the year with a roughly $4.8 billion surplus, while Connecticut had hundreds of millions of dollars in surplus dollars even after previously passing the largest tax cut in its history, according to NASBO.

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Samantha J. Gross of the Globe staff contributed to this report.


Matt Stout can be reached at matt.stout@globe.com. Follow him @mattpstout.