The money expanding child care access this year comes from one-time surplus funds and maintaining the broader availability will mean finding a permanent home for it in next year’s state budget — a lobbying challenge one budget analyst flagged Monday for early education advocates.
The supplemental budget on Gov. Maura Healey’s desk includes about $1.35 billion in surplus surtax revenue, with about $189 million of it billed for the early education sector.
Victoria Bergeron, senior policy researcher for the Massachusetts Taxpayers Foundation, said most of the early education money ($150 million) is set to be transferred into a fund dedicated to support child care financial assistance (CCFA). There is also money for wait-list reduction, early educator loan forgiveness, and child care for educators’ children.
Speaking to Strategies for Children’s “9:30 Call” to preview the fiscal year 2027 budget negotiations that got underway last week, Bergeron said lawmakers and the governor have consistently supported between $900 and $1 billion from the General Fund for the Department of Early Education and Care, but that additional spending with income surtax revenues is “where we’ve seen a lot of the growth and investment in EEC come from.”
“On the CCFA, I think the big-picture bottom line, especially as we get to next year, is that the funding that was included in this year’s supplemental budget to expand access and support early educator loan forgiveness and support early educator personal child care, that’s all going to have to be built back into the operating budget next year. So that’s just a trend we’re watching, not just in early ed, but it’s happening in other areas of education, transportation as well, with that surplus surtax supplemental budget,” she said. “There’s a lot of funding being appropriated and invested through that supplemental bill that will really need to be annualized in future and future budgets as well, because that funding is really a one-time resource with the surplus surtax.”
The 4% surtax on income over about $1.1 million that voters approved in 2022 has generated more revenue than projected each year it has been in effect. The Department of Revenue said it brought in almost $2.99 billion in fiscal 2025 and reported last month that surtax collections had already topped $3.1 billion with two months left to go in fiscal 2026, a year for which the budget planned to use $2.4 billion in surtax revenue. The money is supposed to be used only for education or transportation causes.
Bergeron noted that the surtax funds have been used to keep the popular Commonwealth Care for Children (C3) child care center grant program going after pandemic-era federal funding dried up. That program has been level-funded at $475 million “but the funding sources keep churning, now leaning on surtax plus $100 million from the new iLottery” launching this summer, she said.
