PROJECTMassachusetts

State Fiscal Briefs

May 2022

Looking for Massachusetts data related to the pandemic? We have health, economic, and fiscal data on our new tool, How the COVID-19 Pandemic is Transforming State Budgets.

Massachusetts’s budget basics

According to the National Association of State Budget Officers (NASBO), Massachusetts’s total expenditures in fiscal year (FY) 2021 were $68.5 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2021 were $2.7 trillion, ranging from $4.7 billion in Wyoming to $512.8 billion in California.

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 $82.4 billion in FY 2019 (the most recent year census data were available), or $11,950 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 $10,161.

Massachusetts’s largest spending areas per capita were public welfare ($3,574) and elementary and secondary education ($2,455). 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 $85.8 billion in FY 2019, or $12,446 per capita. National per capita general revenues were $10,563. Massachusetts uses all major state and local taxes. After federal transfers, Massachusetts’s largest sources of per capita revenue were property taxes ($2,590) and individual income taxes ($2,487).

Massachusetts’s politics

Governor Charles D. Baker, a Republican, was elected in 2018 with 67 percent of the vote. The next gubernatorial election is in 2022.

Massachusetts has a divided government. Democrats control both the House of Representatives (130 Democrats to 29 Republicans and 1 independent) and Senate (36 Democrats to 3 Republicans), with veto-proof majorities in both houses. The entire legislature is up for election in 2022 because both representatives and senators serve two-year terms.

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.)

Massachusetts’s current budget

Governor Baker released his FY 2023 budget proposal and gave his state of the state address in January 2022.

Massachusetts enacted its FY 2022 budget in July 2021. The enacted budget included $47.6 billion in general fund spending, a 4 percent increase over FY 2021. (Massachusetts’s general fund includes spending that NASBO categorizes as “other state funds,” so the historical totals reported below are lower. See NASBO’s report for more detail.)

Under the American Rescue Plan, Massachusetts will receive $5.3 billion in direct state fiscal aid and $3 billion in local government aid from the federal government. As of January 2022, Massachusetts had spent part of its ARP funds on public health programs and revenue replacement.

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

  • FY 2021: $32.2 billion/$68.5 billion

  • FY 2020: $29.5 billion/$63.1 billion

  • FY 2019: $28.6 billion/$59.8 billion

For more on Massachusetts’s budget, see