Massachusetts Has a Spending Problem

Massachusetts’ state spending is growing fast. It outpaces taxpayers’ income growth, and even inflation.

Since Fiscal Year 2018, Massachusetts’ state spending has grown by more than $20 billion, an incredible increase of more than 51%. But what was driving this much spending growth over such a short period of time?

How Did State Spending Increase So Much?

The largest drivers of Massachusetts’ spending are in the Executive Offices of Education and Health and Human Services. While these are generally key services funded by the state, the magnitude of increases in these departments is unprecedented.

State spending for the Executive Office of Education has grown 76% since 2018, but the number of students served by this spending are declining. This includes the passage of the Student Opportunity Act in 2019, which authorized a $1.5 billion increased in elementary and secondary school funding over seven years.

• According to data published by Pioneer Institute, Massachusetts public elementary and secondary school enrollment has declined over this time period by roughly 4% (a decrease of almost 40,000 students).
• Public higher education fall enrollment has declined as well, by about 7.7%, according to the state’s Department of Higher Education.

State spending for the Executive Office of Health and Human Services has grown roughly 48% ($10.3 billion) since 2018, which includes the state’s MassHealth health insurance system.

• Over this time frame, MassHealth enrollment has only increased by about 10%. Enrollment peaked in 2023 as a result of the COVID-related pause on eligibility redeterminations and has declined by 19% since.
• State spending in this area has also more than doubled the rate of inflation for medical care costs. According to the Consumer Price Index for the Boston metropolitan area, medical care costs have grown roughly 17% since 2018.

Even beyond the Commonwealth’s major expenditures, other areas of the budget have grown exponentially, accounting for billions of dollars in spending increases since 2018. Several areas are outpacing the overall rate of spending increases, growing up to five times faster. For example:

• The state’s Executive Office of Technology Services and Security funding has increased by a whopping 337% since 2018;
• The Executive Office of Energy and Environmental Affairs funding has increased by 113% since 2018; and
• The Executive Office of Labor and Workforce Development funding has increased by 108% since 2018.

Spending for the state’s Legislature, Judiciary, and Administration and Finance department has also steadily increased, representing billions in spending increases since 2018. All together, the rapid growth of these departments alone represents nearly $3 billion.

This time frame includes the onset of the COVID-19 pandemic, which introduced new spending shocks and adjustments to the state’s budget, requiring increased spending across a number of critical areas, much of it supported by federal funding. However, instead of stabilizing after COVID recovery and bringing spending and spending growth back to pre-COVID levels, the state’s budget has continued to grow at an unsustainable pace, even as the federal funding that supported this increased spending ended.

• Prior to COVID, annual increases averaged 2.9% from FY2017 to FY2019, representing roughly $3.5 billion in added spending during this period;
• After COVID and recovery, the state’s annual spending increases averaged more than 5%, representing more than $8.4 billion in added spending in FY2024 to FY2026.

During this period, Massachusetts also passed a surtax on incomes over $1 million annually, which contributed to greater spending, particularly in education and transportation programs. Yet even since the surtax’s passage, the growth in state spending since then (20%, or $12.8 billion from FY2022 to FY2025), has outpaced revenue growth over this period (6%, or $2.6 billion from FY2022 to FY2025).

Massachusetts is Spending Faster than Taxpayers’ Income Comes In

While state spending grew by more than 51% since Fiscal Year 2018, the Commonwealth’s taxpayers have only seen a 42% increase in income growth, and inflation rose by roughly 26%.

How does Massachusetts compare to other competitor states on spending?

The Massachusetts Taxpayers Foundation identified several states that Massachusetts is “competing” with for residents, due to their relatively more attractive tax structures, lower cost of living, and growth in economic opportunities. To compare state spending levels, we standardized each state’s spending growth as a percentage of the total income of its residents. This analysis shows Massachusetts spends significantly more as a percentage of residents’ income than its competitors.

Massachusetts’ state spending grew 51.5% from Fiscal Year 2018 to the present. In this year’s budget, state spending represented nearly 9% of taxpayers’ personal income. That is significantly higher than key competitor states:

In fact, Massachusetts’ state spending has become a larger percentage of taxpayer income over the years, while these other competitor states have seen state spending as a percent of income drop.

• Florida’s budget grew 42.5% from 2018-2026, and this year state spending was 6.9% of taxpayer income;
• New Hampshire’s budget grew 39.0% over this period, and this year state spending was 6.9% of taxpayer income; and
• North Carolina’s budget grew 41.7% over this period, and this year state spending was 4.5% of taxpayer income.

This trend suggests that if left alone, Massachusetts’ state spending will continue to skyrocket past sustainable levels. If this continues, how does the state expect Massachusetts taxpayers to continue to foot the bill as state spending takes up a larger and larger portion of their income?

Massachusetts state spending is growing faster than the income of taxpayers who are footing the bill. Even in major spending categories like education and health and human services, the rate of spending increases is outpacing growth in the people who use core services. Other areas of the budget are increasing even faster, adding billions in spending over the last few years.

Conclusion

Massachusetts taxpayers are concerned about state spending providing value for their tax dollars. In a March 2025 MOA poll, only 13% of voters said they believed they were definitely getting good value for their tax dollars through state funded services. That number is similarly low among voters even for “core” spending areas like education or health.

Massachusetts has skyrocketed past sustainable spending levels that benefit its taxpayers. It’s time to rethink the state’s spending habits and start ensuring taxpayer dollars are used efficiently for key programs and services while limiting the need for unchecked massive annual budget increases.