Healey's State of the Commonwealth address calls for increased education and transportation spending

Beleaguered public transit, K-12 education, and the growing climate and clean energy technology sector would all get major boosts in state funding under Gov. Maura Healey's vision for the year ahead.

In a State of the Commonwealth speech marbled throughout with claims of success from her first year in office, Healey laid out a series of priorities for 2024, including legislative action on a sweeping housing development plan and a campaign to improve reading education amid lackluster test scores.

While headwinds continue to buffet the state's finances, Healey mostly called for substantial increases in spending on some of the most persistent issue areas, including an MBTA that has saddled riders with unreliable service and sees regular shutdowns, both planned and spontaneous. 

The crisis at the T long predates Healey, who installed a new general manager, transportation secretary and a majority of the agency's oversight board since taking office. Officials in the past year have overseen a significant hiring blitz that increased the agency's headcount by 730 employees. 

After overhauling the T's top ranks, Healey signaled Wednesday she will now press to update its finances. She said her fiscal year 2025 state budget will propose to "double our support for MBTA operations and tackle deferred maintenance," plus establish a "permanent reduced fare for low-income T riders."

Neither Healey nor administration officials put specific figures on her proposed MBTA investments, but those commitments are likely to cost tens or hundreds of millions of dollars. The fiscal year 2024 state budget steered a $187 million operating transfer to the MBTA, which also receives significant funding from a dedicated portion of the state's sales tax. And MBTA officials estimated last year that a low-income fare program would cost about $55 million per year once fully implemented.

The governor also pledged to "increase funding for local roads and bridges to record levels, with special investments dedicated to rural communities," and convene a task force to rethink long-term transportation financing questions "in the clean energy era."

"I promise under our administration, we aren't kicking the can down the road any longer on anything difficult," Healey said during her nearly hour-long speech in the House Chamber.

Her upcoming budget bill, due next week, will propose $30 million to kick off a five-year campaign designed to make Massachusetts "first in literacy" among its peers.

As Healey pointed out in her speech, a majority of third-graders did not achieve the "Meeting Expectations" level in last year's English Language Arts MCAS exams. The governor pitched her "Literacy Launch" campaign as a way to right the ship by improving reading instruction for students between three years old and third grade.

"We will make the best reading materials available to more districts. Schools that are using the right materials now are seeing major gains. We can bring that impact to every single classroom," she said. "We'll also mandate that educator training programs teach evidence-based instruction and we'll support our teachers in adopting best practices every step of the way."

Healey also said her budget will fully fund another year of the Student Opportunity Act.

Fiscal year 2025 marks the fourth budget cycle for the law that former Gov. Charlie Baker signed in 2019, which sought to invest an additional $1.5 billion over seven years in state aid to public schools. Beacon Hill paused the measure's implementation during the first year of the pandemic, leaving six years to fully fund the increases.

The fiscal year 2024 budget Healey signed in August boosted Chapter 70 funding to K-12 schools by $594 million, or 9.9 percent.

Healey's two immediate predecessors made a point of deploying their political capital, and public dollars, to help grow and then bolster the life sciences industry's presence in Massachusetts.

Former Gov. Deval Patrick in 2008 oversaw a 10-year, $1 billion investment in the sector, combining tax incentives, loans and other business-friendly policies designed to make the Bay State one of the national hubs for life sciences while launching the Mass. Life Sciences Center to manage the campaign. In 2018, former Gov. Charlie Baker secured another five-year, roughly half-billion dollar package supporting the industry, and lawmakers in 2022 extended the program until 2025.

The combined, years-long effort has had visible impacts. Today, many of the world's most well-known biopharmaceutical firms have a footprint in Massachusetts, particularly in and around Cambridge.

Healey said Wednesday she will renew those investments with an eye toward "a new era of innovation." She'll also launch a similar effort for another industry: climate and clean energy technology.

"We're going to go out and win another world changing industry. We're going to make Massachusetts the climate innovation lab of the world," Healey said. "We'll help climate tech companies not just start in Massachusetts, but scale in Massachusetts, creating good jobs in the climate corridor we're building across our state."

The state's embrace of a clean energy future will also feature a new workforce plan, according to Healey, who added that the administration this year would fund no-cost HVAC training at schools across the state.

"The heroes of this revolution will be the electricians, the builders, the HVAC installers and more," she said.

After a stretch of severe weather inundated farms last year, especially in central and western Massachusetts, Healey said Wednesday she plans to propose a permanent "disaster relief resiliency fund" to help those impacted in the future.

Her numerous investment goals could be partially stymied by an increasingly uneasy financial picture. After six straight months of below-projected tax revenues, Healey last week slashed $375 million in fiscal year 2024 spending, and Beacon Hill's budget-writers agreed to forecast little to no tax revenue growth through June 2025.

Healey noted in her speech that Massachusetts had "several flush years with a lot of pandemic-level funding from the federal government that now goes away."

"So we need to be smart with how we spend our money, your money. That's what we're going to do," she said. "The good news is our economy and our fiscal health are strong. Our bond rating is excellent -- thank you, Treasurer Goldberg -- and we have record amounts in the rainy-day fund."

One factor contributing to the strain has been an explosion in demand for emergency shelter services. Massachusetts, which is the only state in the country that guarantees certain families shelter placement under state law, has faced an unprecedented number of applications over the past year partly due to thousands of migrant families that are pouring into the state.

The administration estimates the crisis will cost nearly $1 billion annually this year and next year, and it plans to propose using an entire $700 million state savings account to cover the unexpected costs.

Healey on Wednesday described the situation as "a hard issue, and one without easy answers" while also praising her administration's work with the federal government to connect thousands of migrants with work authorization.

"And I want to be clear: while Massachusetts did not create this problem, we're going to continue to demand Congress take action to fix the border, to get us funding," she said.

Elected officials and politicos packed into the House Chamber for Healey's first State of the Commonwealth address since taking office a bit more than a year ago. On hand for the speech were Boston Mayor Michelle Wu, former Govs. Michael Dukakis and Jane Swift, former Senate President Stanley Rosenberg, and former House speakers Charles Flaherty, Sal DiMasi and Robert DeLeo.

Healey looked back on her first year with aplomb, declaring at one point that her team "met every single one of those goals" outlined in her inaugural address. She praised the use of state funding to make school meals free to all students, the MassReconnect program that covers unmet community college costs for some adults, and support for farmers and other Bay Staters devastated by severe weather.

Another victory lap focused on the roughly $1 billion per year tax relief package Healey signed last year, which she said will "save money for everyone in our state." She did not describe any new major tax code changes, either additional cuts or hikes to generate more revenue, that she plans to pursue this year.

Reflecting on the struggles many Bay Staters face with high costs, Healey recounted her own childhood being raised by a single mother.

"One night I remember, years ago, we were sitting around the kitchen table, and I could see she was hiding tears. She picked up her head and softly asked my little brother if she could use his savings from yardwork and babysitting to pay taxes," Healey said, her voice wavering. "He was 11. You do what you have to do. People do what they have to do. I understand that. And as I see it, government should be there to make life easier, not harder."

The "biggest challenge we face" today, Healey said, is a statewide lack of available and affordable housing that has only grown more palpable.

Healey targeted the issue with a $4.1 billion housing bond bill she filed in October, which is packed with more than two dozen policy reforms she argues will spur production of more units to meet overwhelming demand.

Lawmakers sat on Healey's sweeping housing bond bill for about three months, and it will make its first official foray into the legislative spotlight Thursday. The Housing Committee plans a hearing in Gardner Auditorium, the State House's largest hearing room, to weigh testimony on the package.

Healey will attend and make her own direct pitch for the bill, alongside Lt. Gov. Kim Driscoll and Housing Secretary Ed Augustus.

"Passing it is our top priority, so let's work together and get it done," she said Wednesday night.