Plan does not rely on any new taxes; Governor will propose $300 million in Chapter 90 funding, a 50 percent increase for municipal roads, bridges and infrastructure

WORCESTER - On January 14, 2025, Governor Maura Healey announced a plan to make historic investments in the state’s roads, bridges and regional transportation system and immediately stabilize the finances of the MBTA, putting it on a path of long-term stability. The investments – representing $8 billion over the next 10 years – would be done without raising taxes and represent the largest state transportation investment in more than 20 years by maximizing Fair Share revenue and other existing resources.

The plan will be filed as legislation in the coming weeks as part of the Governor’s Fiscal Year 2026 (FY26) budget proposal and an accompanying supplemental budget. It puts into action many of the recommendations made by the Transportation Funding Task Force, which delivered its final report to the Governor outlining multiple steps for stabilizing and enhancing transportation while setting the stage for ongoing discussion about how best to finance transformative investments in transportation into the future.  

“This historic transportation proposal represents smart, forward-thinking fiscal management, and it will have an impact on people in all regions of our state,” said Governor Healey. “We’re going to invest billions of dollars to deliver better roads, less traffic, safer bridges and a transit system that works in every region. We’ll close the MBTA’s budget gap, improving service and upgrading stations, and we’ll move forward on regional projects like West-East Rail. And we’ll do this all without raising taxes. I’m grateful for the insights of the Transportation Funding Task Force, which shaped this proposal, and for the strong leadership of Secretary Tibbits-Nutt and Gorzkowicz.”

“This plan will not only stabilize the finances of the MBTA but also dedicate new and critical resources to our Regional Transit Authorities and municipalities, accelerate our efforts to repair crumbling bridges, fix our culverts and advance important projects throughout the state,” said Lieutenant Governor Kim Driscoll. “Our administration knows the role a safe, reliable and efficient transportation system plays in the future of Massachusetts and this plan represents a gigantic step forward.”

The Healey-Driscoll Administration is maximizing existing Fair Share Funds through an innovative funding mechanism and strong fiscal management. The proposal would:

• Immediately direct $857 million in surplus Fair Share revenue from FY24 to public transportation.
• Dedicate $765 million in Fair Share resources from FY26 to the Commonwealth Transportation Fund, building on an innovative strategy developed by the Healey-Driscoll administration to maximize Fair Share through borrowing to yield $5 billion over the next 10 years for capital investment bonds in rail, roads, bridges, Regional Transit Authorities and culverts. 
• More than double support for the MBTA’s operating budget to $687 million in FY26 and immediately address the agency’s budget shortfall, putting the MBTA on a path of long-term stability. This increase comes after the Governor’s doubled the operating budget to $314 million in FY25.

As part of this capital expansion, Governor Healey intends to file a multi-year Chapter 90 bill later this month that will grow the size of the funding pool directed to cities and towns to $300 million per year for five years, the highest amount in the history of funding for local roads and sidewalks. This additional $100 million annual investment represents a 50 percent increase to support the repair of municipal roads, bridges and infrastructure.  

The combined impact of the Governor’s House 1 budget proposal for FY26 and the supplemental budget to spend surplus Fair Share revenue from FY24 will achieve a 50 percent-50 percent split between Fair Share resources dedicated to transportation and education since enacted of the voter-approved surtax. This was one of the key recommendations included in the Transportation Funding Task Force report.

Among the improvements that this funding will allow include:

• $1.4 billion in investments at the MBTA for new commuter rail coaches, Red and Orange Line cars, station accessibility and resilience, track improvements and power system resiliency. 
• $2.5 billion for road and bridge repairs across the state through MassDOT, with money set aside for culverts, small bridge repairs and safety and congestion hot spots. 
• Close the funding gap for the Allston I-90 Multimodal Project 
• Allow for projects advancing West-East Rail to continue to move forward, including capacity improvements near Pittsfield, trackwork and accessibility improvements in Springfield, and station planning in Palmer.?

“Governor Healey and Lt. Governor Driscoll have stressed that transportation systems must work if we want our communities to thrive, and the announcements today further the state's vision to improve infrastructure by recommending significant financing initiatives for the short and long-term,” said Massachusetts Transportation Secretary and CEO Monica Tibbits-Nutt.?“With the Governor's plan, we are taking very actionable steps to increase the use of Fair Share revenue, offer municipalities more money through the Chapter 90 program, double support for the MBTA's operating budget, and expand microtransit services.” 

“This plan builds upon the success we have already achieved by leveraging Fair Share dollars through the Commonwealth Transportation Fund to invest in FY25 in critical infrastructure and puts the work of the Transportation Funding Task Force into immediate action. By borrowing against Fair Share revenue, we have devised an innovative strategy that will allow us to not only continue to invest in key projects and infrastructure, but also solve the MBTA’s funding crisis not just for this year but years into the future,” said Secretary of Administration and Finance Matthew J. Gorzkowicz. “I’m grateful to Governor Healey, Lieutenant Governor Driscoll and members of the task force for their support and guidance as we crafted this proposal that will make historic investments in the foundation of our transportation infrastructure.”

“On behalf of the MBTA, I thank the Healey-Driscoll Administration for their visionary leadership and commitment to strengthening public transportation across Boston and the entire Commonwealth,” said General Manager and CEO Phillip Eng. “This solution-oriented approach is leading to a historic investment and will provide critical support to the MBTA, including our operating capacity, improving service, and ensuring a more sustainable, reliable transit system for all riders. As we move forward, I am committed to ensuring that we remain focused on the needs and expectations of the public we serve. We're going to make the best use of the public's dollars by building a more efficient and capable workforce, and delivering meaningful projects and services that improve the transit experience for everyone.”

After covering $100 million in debt service on new borrowing, the FY26 budget will propose to invest:

• $687 million to stabilize MBTA operations, including $500 million from Fair Share to to fund programs such as the MBTA Workforce Academy, low-income fares?and?water?transportation programs 
• $110 million for Regional Transit Authorities?, including $66 million for formula-based transit improvements, $30 million for Fare Free service and $10 million to facilitate interconnectivity between RTAs?
• $55 million for MassDOT operations?, including workforce investments? and enhanced capital project delivery?

The surplus Fair Share supplemental budget to be filed by Governor Healey will propose to invest $857 million of the $1.3 billion surplus available for spending in transportation, including:

• $400 million to address workforce and safety initiatives identified as necessary by the Federal Transit Authority
• $300 million to replenish MBTA reserves
• $25 million for a Winter Resilience Assistance Program for municipalities
• $25 million for RTA workforce recruitment and retention
• $10 million for microtransit

The multi-pronged financing plan leans on Fair Share, which has performed exceedingly well as a revenue source for Massachusetts. In FY24, the state collected $2.46 billion from the surtax, nearly $1.5 billion above what had been budgeted.

The financing plan also calls for using $170 million available from the administration’s pool of federal matching funds to retire the MBTA’s legacy debt ($89 million), freeing up operating capacity at the agency. These matching funds will also continue to support the administration’s strategy of aggressively pursuing federal funding, with matching dollars committed to the Green Line Central Tunnel project as well as local technical assistance and local project matches.

Lastly, the administration plans to use $1.2 billion in Grant Anticipation Notes (GANs) to borrow against future federal highway grants to finance priority Highway Division projects statewide.

The financing plan was heavily informed by the work of the Transportation Funding Task Force, which was created by Governor Healey through executive order last January. The Task Force spent the past year reviewing current and projected revenue sources, comparing those sources to benchmarks and trends in peer and neighboring states and exploring innovative financing approaches and alternative pricing mechanisms.

The Task Force developed a framework focused first on stabilizing the transportation system’s finances and addressing critical infrastructure repair needs. Additional recommendations looked at how to Enhance and Transform the system.

Some of the recommendations included:

• Allocating half of Fair Share revenues to transportation over time
• Expanding capital capacity for transportation by dedicating a significant portion of Fair Share revenue to the CTF
• Using Fair Share to stabilize public transportation agency operations
• Maintaining predictable and stable funding for investments in Regional Transit Authorities and microtransit providers
• Increasing investment in the Chapter 90 local roads programs by at least 50 percent to improve local transportation infrastructure condition 
   

Statements of Support: 

Worcester City Manager Eric D. Batista

“Substantial investment in public transportation is critical for growing communities like Worcester. These funds will directly impact and enhance the life of residents who use the Commuter Rail to connect to Boston and beyond, ride the Worcester Regional Transportation Authority to conduct daily activities, and traverse our local roads to move around the city safely and efficiently. Thank you to the Healey-Driscoll Administration for recognizing the importance of this investment and the improvements it will make possible, both in Worcester and across the entire state.” 

Kate Dineen, President & CEO, A Better City:

"The central recommendations put forward by the Transportation Funding Task Force are strategic, fiscally responsible, and actionable—and Governor Healey's budget proposal takes immediate action to implement many of these recommendations by directing historic levels of investment to stabilize our statewide transportation infrastructure. By prioritizing the equitable use of Fair Share surtax revenue and utilizing federal funding, the Governor's proposal reflects the Task Force's tactical approach to expeditiously direct billions of dollars in capital and operating funding to support the MBTA and RTAs, while also investing in critical roadway infrastructure in municipalities across the state. Thank you to Governor Healey and her team for convening this Task Force, for giving A Better City the opportunity to serve, and for confronting our transportation crisis head on. We look forward to working with the Healey-Driscoll Administration, Legislature, business community, and transportation advocates in the coming weeks and months to build a stronger, more competitive statewide transportation system and regional economy."

James E. Rooney, President & CEO of the Greater Boston Chamber of Commerce:

"The Chamber applauds the Healey-Driscoll's administration's historic $8 billion transportation investment that will advance success for workers, families, businesses, and our economy. Our residents, visitors, and companies need and deserve reliable transportation options that will drive business and job growth and improve the quality of life in the region. With the important work of the Transportation Funding Task Force and the strong commitment of Governor Healey and Lieutenant Governor Driscoll, we now have a bold vision for the future of transportation for the Commonwealth."

Doug Howgate, President, Massachusetts Taxpayers Foundation:

“Putting forward a clear and timely strategy to deploy surtax revenues is a major step forward in meeting our transportation needs and creating a sustainable financing plan for supporting them.  Today’s announcement not only moves us toward transportation parity in the use of the surtax, the proposal to increase the dedication of these taxpayer dollars to the Commonwealth Transportation Fund is a smart way to maximize these resources in service of addressing long-term capital needs as well as delivering better service to riders and our region.”

Rebecca Davis, Chief Operating Officer, Massachusetts Competitive Partnership:

"The Massachusetts Competitive Partnership applauds the Healey-Driscoll Administration’s historic $8 billion transportation investment. A world-class transportation system is necessary for Massachusetts to remain competitive. As a member of the Governor's Transportation Funding Task Force, I’ve seen the critical need to stabilize, enhance, and transform our transportation infrastructure. This funding is vital to strengthening public transit, improving climate resilience, and driving economic growth, ensuring a strong and thriving future for Massachusetts and its residents."

Dr. Amie Shei, President and CEO, The Health Foundation of Central Massachusetts:

“These historic transportation investments announced by the Healey-Driscoll administration will strengthen the Commonwealth’s critical transportation infrastructure for years to come.  Transportation is an important social determinant of health that impacts health and wellbeing, and its benefits extend far beyond transporting a rider from one destination to another. The inclusion of funding exclusively for microtransit demonstrates the administration’s commitment to regional equity, as residents in all regions, including rural regions, need flexible transportation options to access jobs, health care, social services, and education.”

Brian Kane, Executive Director, MBTA Advisory Board:

“The 178 cities and towns comprising the MBTA Advisory Board applaud the Healey/Driscoll Administration’s bold approach to stabilizing the MBTA’s finances. These actions will strengthen the Commonwealth’s competitiveness, and make Massachusetts stronger and more successful.”