Well, folks, it looks like Massachusetts is rolling in the dough once again! Lawmakers are getting ready to dive into another billion-dollar surplus, thanks to the “millionaires tax” that was put into place a couple of years ago. This tax is expected to rake in billions of dollars, and state officials are already rubbing their hands together in anticipation of all that cash.
The surtax on high earners has already brought in a whopping $2.6 billion in revenue this fiscal year, with a couple of months still left to go. This money will be used to fund transportation and education initiatives, which is great news for the people of Massachusetts. Any extra cash that’s raised beyond the initial $1 billion budgeted will go into a reserve account, where policymakers can dip into it for special projects or programs. It’s like a little savings account for the state, but with billions of dollars in it!
In 2022, voters gave the thumbs up to a ballot initiative that slaps an extra 4 percent tax on folks earning over $1 million annually. This tax brought in $2.46 billion in its first full year, with a cool $1.3 billion of that as surplus. Lawmakers are now squabbling over how to spend all that extra moolah, with the House and Senate trying to come to an agreement on their competing proposals. The revenue is only going to keep growing as more cash rolls in for May and June. The Department of Revenue will let us know the official amount raised later this year, so stay tuned for that exciting update!
But hey, who really knows how much more this surtax will bring in down the road? Doug Howgate, president of the Massachusetts Taxpayer Foundation, thinks it’s a bit like trying to predict the weather. The surtax is super sensitive to the stock market and the economy’s performance, so it’s a bit of a wild card. Despite all this extra cash flowing in, the state still has to watch out for more cuts from the federal government. Attorney General Healey recently announced a hiring freeze at the state’s executive branch to brace for what she calls “more uncertain economic times.” Sounds like they’re trying to play it safe, even with all that extra dough coming in.
