July 2026 Legislative Update

Agreement Reached on Fiscal Year 2027 Budget; Sent to Governor for Approval

On the day of the fiscal year’s start, the Massachusetts legislature passed a Conference Committee report on the fiscal year 2027 (FY’27) budget that does not raise taxes or create new ones.  According to the Massachusetts Taxpayers Foundation, the House and Senate enacted a $63.42 billion FY’27 budget, representing 3.9 percent spending growth over the FY26 General Appropriations Act and approximately $54 million more than Governor Healey's budget proposal.

Within that overall spending plan, several targeted line-items are especially important to cities, towns, ratepayers, contractors, and public water and sewer systems. The Clean Water Trust contract assistance line-item, funded at $63,383,680. The conference report directs this funding to the Massachusetts Clean Water Trust for contract assistance, including debt service obligations, principal forgiveness, interest rate reductions, subsidies, and other forms of financial assistance under chapter 29C. This line-item is critical because the Clean Water Trust is one of the Commonwealth's primary vehicles for helping municipalities finance drinking water, wastewater, sewer, and stormwater projects. By reducing borrowing costs and supporting principal forgiveness, the Commonwealth helps local governments advance projects that would otherwise place greater pressure on municipal budgets and ratepayers.

The Conference Committee report also funds the main administration of the Massachusetts Department of Environmental Protection (MassDEP) at $51,438,149. The appropriation supports MassDEP operations, including environmental oversight, permitting, enforcement, laboratory and technical functions, and related agency responsibilities. The line-item also includes language requiring MassDEP to report on hiring, staffing levels over the prior 10 fiscal years, enforcement actions, fine collections, and recommendations for additional resources needed to fulfill the department's enforcement responsibilities. MassDEP is the agency responsible for permitting, compliance, and regulatory oversight across a wide range of drinking water, wastewater, wetlands, stormwater, and pollution-control programs. As UCANE argues in its continuing support for amendments raising MassDEP funding, without adequate MassDEP staffing, even well-funded infrastructure programs can be slowed by permitting delays, compliance backlogs, and insufficient technical support.

The FY27 budget further recognizes the ongoing need to address underground storage tanks and petroleum contamination. In continuing to address the back-log on this ongoing program, the budget provides $5,842,714 for underground storage tank reimbursements to parties that have remediated petroleum product spills, with priority for approved claimants who own or formerly owned not more than four dispensing facilities. It also provides $1,892,435 for the Underground Storage Tank Petroleum Cleanup Fund Administrative Review Board and for administration of the underground storage tank program, including reporting on municipal grants, reimbursements, backlog claims, wait times, and tanks that are not in compliance. These investments matter for water quality because leaking or noncompliant tanks can threaten groundwater, public water supplies, and nearby environmental resources, particularly in communities that rely on vulnerable aquifers or well systems.

Finally, the Commonwealth Sewer Rate Relief Fund is also funded in the Conference Committee report at $1,500,000. Although modest compared with the scale of local sewer and wastewater costs, the line-item remains symbolically and practically important. Sewer infrastructure projects are capital-intensive, frequently driven by federal and state environmental mandates, and often paid for through local user rates. Rate relief funding helps acknowledge that the cost of environmental compliance and infrastructure modernization should not fall entirely on municipal ratepayers, especially in communities facing combined sewer overflow requirements, aging treatment facilities, infiltration and inflow problems, or major collection-system upgrades.

All said, these line-items reflect a practical water infrastructure agenda within the FY27 conference budget: help municipalities finance major projects through the Clean Water Trust, maintain DEP's capacity to permit and enforce environmental laws, address contamination risks from underground storage tanks, and provide ratepayer relief for sewer costs. The challenge for the Commonwealth is that these appropriations must be sustained and, eventually, expanded over time. Massachusetts communities face billions of dollars in long-term drinking water, wastewater, stormwater, and underground utility needs, and annual operating budget line-items are an essential complement to bond bills, federal funds, and local borrowing.

To view the Conference Committee report on the fiscal year 2027 budget, please visit: https://malegislature.gov/Budget/ConferenceCommittee.

Senate Passes Energy Bill; Competing Strategies for Reducing Residential Bills Heads to Conference

Early July saw the Massachusetts Senate debate and pass an energy savings bill, Senate Bill 3143, An Act to save people money, repair the climate and grow the economy. The Senate energy proposal is framed around reducing energy costs while maintaining the Commonwealth's climate and clean energy objectives. The bill identifies several projected ratepayer savings measures, including securitization of certain utility costs related to grid modernization, storm recovery, and gas system transition; adjustments to Renewable Portfolio Standard requirements for 2027 through 2029; reductions in net-metering credits for large non-residential standalone facilities; and changes to renewable energy credit treatment under the SMART solar program. Collectively, these provisions are presented as mechanisms to lower utility bills, reduce compliance costs, and avoid near-term cost increases associated with energy system modernization.

The Senate proposal also includes changes to how energy is procured, priced, and reviewed by state regulators. The recently passed legislation would allow the Massachusetts Department of Energy Resources (DOER) to serve as the contracting agent for certain clean energy procurements, modify the timing and duration of default electricity supply procurement to reduce seasonal price swings, and direct the Massachusetts Department of Public Utilities to review certain reconciling charges that contribute to bill volatility. The bill also calls for an investigation into the gap between default electric service prices and actual market costs, with the goal of determining whether further changes could reduce customer bills. These provisions focus less on direct rebates and more on structural changes to procurement, ratemaking, and regulatory review.

A separate set of provisions addresses energy efficiency, utility planning, and energy innovation. The proposal would restructure aspects of Mass Save program administration by capping planning and administrative spending, limiting mid-term budget increases, and creating a temporary Energy Efficiency Management Review and Financial Oversight Board. It also includes provisions related to competitive electric suppliers, customer financing for home energy improvements, utility-owned single-customer geothermal systems for large institutions, third-party investment in distribution infrastructure, renewable natural gas, and comprehensive distribution planning. Of particular interest to UCANE members, the bill would also narrow and phase out the Gas System Enhancement Program (GSEPS) by 2030, shifting gas infrastructure spending back toward traditional regulatory review and focusing remaining work on leak-prone infrastructure. The proposal is of significant concern to developers, contractors and labor organizations.

During Senate consideration, the chamber considered, but did not adopt Amendment #65, offered by Senator Mike Moore and co-sponsored by Senator Bill Driscoll, which would have created a special commission focused on medium- and heavy-duty truck end users. The proposed commission was intended to bring together affected industries and public- and private-sector stakeholders to evaluate practical strategies for reducing emissions from medium- and heavy-duty vehicles while the Commonwealth works toward longer-term electrification and zero-emission goals. The decision not to include the amendment left unresolved a policy question that remains important to trucking, towing, construction, utility, municipal, and other end-user sectors: how to reduce emissions in the near term while accounting for vehicle availability, charging and fueling infrastructure, duty cycles, cost, grid readiness, and the operational realities of essential fleet-based industries.

The energy bill now heads to a Conference Committee of three Senate and three House members. In February, the Massachusetts House of Representatives passed its own energy affordability bill by a 128-27 vote. The House proposal was projected by House leaders to produce more than $9 billion in ratepayer savings over 10 years and emphasized near-term affordability measures, including a one-time $1 billion reduction to Mass Save, changes to surcharges and energy-related charges, expanded support for low- and moderate-income ratepayers, and returning a portion of certain supplier penalty payments to customers. The House bill also included provisions intended to diversify and modernize the energy grid, but its Mass Save reduction became a central point of policy debate as the Senate developed a different approach that relied more heavily on utility cost controls, gas infrastructure reforms, procurement changes, and regulatory restructuring.

To view a copy of the respective energy bills, please visit: (Senate) https://malegislature.gov/Bills/194/S3143 and (House) https://malegislature.gov/Bills/194/H5175.

With Haverhill Sewer Overflow Fresh in Mind, Environmental Bond Bill Conference Committee Named

As news spread of the recent sewer force main failure in Haverhill, it quickly a prime example about the condition of aging water, sewer, and wastewater infrastructure across Massachusetts. During heavy rainfall in late June, a 42-inch sewer force main near the South Mill Street Pumping Station failed, interrupting the system that carries most of Haverhill’s wastewater to its treatment plant. The result was the discharge of untreated wastewater into the Merrimack River, affecting downstream communities, public health advisories, river access, recreation, and confidence in basic environmental safeguards. The DEP has also indicated that, once repairs are complete, Haverhill will be required to conduct an engineering analysis to identify the cause of the force main failure.

Around the same time as the water infrastructure emergency in Haverhill, the Massachusetts House of Representatives passed its version of the Mass Ready Act, a $3.5 billion environmental bond bill, on June 17^th. The House bill authorizes multi-year capital investments intended to modernize environmental laws, strengthen climate resilience, support agricultural and food systems, streamline permitting, and improve the management of natural resources across the Commonwealth. The legislation is designed to provide borrowing authority for key state programs that help municipalities prepare for flooding, drought, extreme heat, and other climate-related impacts, while also supporting environmental protection and local infrastructure needs.

The House action represents a major step in advancing the environmental bond bill, but it also sets up negotiations with the Senate, which passed its own $3.64 billion version of the Mass Ready Act in April. The Senate version included additional policy provisions, including measures related to drinking water protection, climate resilience, outdoor recreation, and plastic waste reduction, while the House version focused on a $3.5 billion bond authorization and did not include some Senate policy language. As a result, the bill will go to Conference Committee, with the final package determining the scope of Massachusetts' next major round of environmental, water, resilience, and natural resource investments.

The emergency response in Haverhill demonstrated the seriousness and complexity of maintaining water infrastructure systems. City personnel, contractors, engineers, and utility partners worked to install temporary bypass pumping, restore wastewater flow to the treatment plant, maintain sewer service for residents and businesses, and begin the process of permanent repair. At the same time, state and local agencies had to coordinate public health advisories and environmental monitoring for the Merrimack River and affected downstream communities. The incident makes clear that when underground infrastructure fails, the impacts are regional, immediate, and expensive.

Hence, the importance of the environmental bond bill. The Mass Ready Act, now headed to a Conference Committee, represents a major opportunity to strengthen infrastructure, protect drinking water, improve climate resilience, support environmental protection, and help municipalities confront the growing cost of adapting public works systems to more severe weather. The Senate advanced a $3.64 billion version of the bill, while the House passed a $3.5 billion version that now requires reconciliation before final enactment. The Conference Committee members include: Senator Julian Cyr, Senator Becca Rausch, Senator Peter Durant, Representative Mike Finn, Representative Christine Barber and Representative Ken Sweezey.

For its part, UCANE, through its direct advocacy and the #InvestInWaterMA campaign have consistently emphasized that water, sewer, wastewater, stormwater, and underground utility projects protect public health, support economic development, improve environmental quality, and reduce costly disruptions before they become emergencies. UCANE’s advocacy also includes efforts to expand and strengthen the role of the Water Infrastructure Advisory Committee, whose statutory purpose is to monitor progress in closing the funding gap for water, wastewater, and stormwater infrastructure. That work is critical because Massachusetts’ needs are long-term, capital-intensive, and statewide. In light of the Haverhill sewer overflow and its impacts on the Merrimack River, UCANE continues to prioritize the environmental bond bill, generally, and efforts to strengthen the Water Infrastructure Advisory Committee as a permanent policy and accountability tool.

To review the competing versions of the environmental bond bill, please visit: (Senate) https://malegislature.gov/Bills/194/S3064 and (House) https://malegislature.gov/Bills/194/H5518.

News in Brief

Massachusetts Ballot Questions Moving Toward the General Election. Several Massachusetts ballot questions are moving toward the November 2026 general election, including the “Protect Water and Nature” initiative, whose supporters submitted final signatures after gathering more than 22,000 additional voter signatures and more than 100,000 signatures earlier in the process. The measure would dedicate revenue from the existing state sales tax on sporting goods to a new Nature for All Fund, with supporters saying it could provide up to $100 million annually for water protection, land conservation, habitat restoration, parks, trails, and outdoor recreation without creating a new tax. At the same time, the field of potential ballot questions has narrowed with the demise of the proposed income tax reduction question, which would have lowered the state income tax rate from 5 percent to 4 percent but was blocked by the Supreme Judicial Court in June. A separate tax-related proposal to revise the state revenue limit remains part of the broader ballot-question debate, with supporters arguing it would return more excess revenues to taxpayers, but the removal of the income tax cut measure significantly reduces the scope of tax-cut proposals likely to appear before voters this fall.

Administration Awards $700K in Grant Funding to Two Municipalities. The Healey-Driscoll Administration recently announced the award of $700,000 through the Drinking Water Supply Protection Grant Program to protect public drinking water resources before they are threatened by development, contamination, drought, or climate-related stress. The Executive Office of Energy and Environmental Affairs awarded $350,000 each to Fall River and Ipswich for land acquisition projects tied directly to safeguarding local drinking water supplies. In Fall River, the funding will support expansion of the Bioreserve Environmental Education and Discovery Center, while in Ipswich it will help acquire land that strengthens drought resilience and protects water resources. By preserving land around reservoirs, wells, wetlands, and recharge areas, the program helps communities reduce pollution risks, protect water quality, avoid higher future treatment costs, and maintain long-term access to clean drinking water. These grants also reflect a broader state strategy to invest in watershed protection, climate resilience, open space preservation, and water infrastructure, underscoring the need for continued legislative support for environmental bond authorizations and targeted grant programs that help municipalities protect public health and prepare for future climate impacts. To learn more about the Drinking Water Supply Protection Grant Program, please visit: https://www.mass.gov/info-details/drinking-water-supply-protection-grant-program.

Boston Globe Highlights Need for Proactive Algae Bloom Action. A recent Boston Globe ediotiral highlights the growing challenge of toxic cyanobacterial harmful algal blooms and bacteria outbreaks in Massachusetts lakes and ponds, which are forcing closures during peak summer recreation periods and raising public health concerns for people and pets. The editorial specifically highlights Crystal Lake in Newton as an example of a municipality taking a proactive approach by using alum treatment to bind phosphorus to the lake bottom, conducting ongoing monitoring and scientific reporting, and investing in stormwater infrastructure to pretreat runoff before it enters the lake. Newton’s work, including $182,500 for treatment and monitoring and a $100,000 state grant for stormwater improvements, demonstrates how targeted investments can help reduce the nutrients that fuel blooms and potentially limit the number of swimming days lost. The broader lesson is that while climate change is making harmful algal blooms more frequent and intense, municipalities and residents can still reduce risks through prevention, stormwater controls, reduced fertilizer use, septic maintenance, pet waste management, shoreline protection, and sustained infrastructure investment before lakes and ponds are forced to close.

May Data Shows Unemployment Rate Declining. According to a press release by its office, the Executive Office of Labor and Workforce Development reported that Massachusetts payroll jobs declined by 2,900 in May 2026, following a revised gain of 7,400 jobs in April, while the unemployment rate fell to 4.5 percent and labor force participation edged down to 65.4 percent. Since September, the state has added more than 17,600 payroll jobs, including 14,100 in the private sector. The strongest month-over-month gains were in Government, Education and Health Services, Trade, Transportation and Utilities, and Information, while Construction and Leisure and Hospitality drove the month’s job losses. EOLWD’s press release noted that the unemployment rate is at its lowest level since last August, but retirements and continued job posting activity suggest the labor market could tighten further this summer. The report follows several Healey-Driscoll Administration workforce and economic development initiatives, including $17.9 million in Workforce Training Fund grants to train and retain more than 15,900 workers, the launch of the Start Your Career in MA online career resource, and a transportation funding bill providing $300 million in Chapter 90 funding and $200 million for infrastructure improvements tied to housing development.