Dividing the Pie: Ensuring Higher Education’s Fair Share (FY24–FY26)

A more balanced distribution across the three education sectors could direct an additional $120 million to Higher Education, providing critical resources to support students and institutions.

Growing Fair Share Revenues

The FY 2026 tax revenue agreement projects $2.4 billion in Fair Share revenue with an agreed spending cap of $1.95 billion. This is $650 million more than the $1.3 billion limit used in FY 2025—a 50% increase.

The remaining $450 million in surplus surtax revenues would be allocated to the Education and Transportation Innovation & Capital Fund ($383 million, 85%) and the Education and Transportation Reserve Fund ($68 million, 15%).

With Massachusetts now reliably expecting $2 billion in Fair Share revenues each year, the state has an unprecedented opportunity to implement a multi-year strategy that robustly invests in both education and transportation.

A Balanced Start with a Concerning Trend for Higher Education

The overall distribution of Fair Share revenues between transportation (47%) and education (53%) has remained relatively balanced.

However, a closer examination of how those funds are allocated within education reveals uneven growth across its key priorities, resulting in a concerning trend in higher education’s  declining share over time.

Uneven Allocation Growth Within Education

Early Education and K–12 have each seen significant growth in their share of Fair Share revenues. Early Education, which started with a comparatively small share of the investment (7% in FY24), increased to 21% in FY25, and is now at 19% in the Governor’s proposed FY26 budget. This reflects a growing recognition of the long-term benefits of early childhood learning. Similarly, K–12’s share of surtax revenue has expanded from 12% in FY24 to 24% in FY26, highlighting continued investment in public schools.

In contrast, Higher Education’s share has declined from 23% in FY24 to a projected 17% by FY26, raising questions about shifting priorities. This issue is further magnified by the proposed FY25 Supplemental Budget, which entirely excludes Higher Education.

Across the past and proposed Fair Share budgets, education is set to receive $2.93 billion in total, with $800 million allocated to Higher Education. A more balanced distribution across the three education sectors could direct an additional $120 million to Higher Education, providing critical resources to support students and institutions.

Ensuring Continued Investment in Higher Education

While new initiatives—such as free community college programs—have garnered attention and represent an important step in expanding access, they do not address the broader funding needs of students. For these efforts to translate into higher degree completion rates and workforce readiness, investments must extend beyond tuition coverage to include targeted financial aid, student support services, and institutional capacity—especially as enrollments grow.

As Fair Share revenues continue to grow, there is enough capacity to support transportation, early education, K-12, and higher education without shortchanging any one priority. A robust public higher education system is indispensable for cultivating a competitive workforce, fostering economic mobility, and sustaining the Commonwealth’s long-term prosperity. Neglecting this sector risks undermining the benefits realized through expanded funding for early and K-12 education, since students ultimately depend on accessible, high-quality higher education to transition into successful careers.