MA: Lawmakers OK $1.3B plan to divvy up millionaires' tax

Backed by record proceeds from the millionaires’ tax, Beacon Hill lawmakers have approved a more than $1.3 billion supplemental budget that earmarks more money from the levy for transportation and education programs.

A bipartisan proposal approved Friday by the Democratic-controlled Senate calls for tapping $1.33 billion from the millionaires tax to support public transit, pre-k programs, early literacy, special education and career technical programs. The House of Representatives previously approved its version of the budget plan.

Senate President Karen Spilka said the chamber’s proposed spending “answers the clear message that our residents sent us in 2022 — to invest these dollars across the state to continue building the high-quality education and transportation system.”

“At a time of economic uncertainty, we are committed to supporting our schools and making sure that residents can travel safely, and these Fair Share funds allow us to do that,” the Ashland Democrat said in a statement.

Both the Senate and House plans call for spending a similar amount of surplus revenue from the so-called Fair Share Amendment, but differ on where the money would be devoted.

The House plan calls for pumping $400 million into the MBTA to fund workforce and safety investments. It also provides $300 million to replenish the T’s depleted savings account, another $60 million for “infrastructure” upgrades, and $20 million to cover costs of reduced fares for low-income riders.

The Senate plan calls for earmarking $670 million for transportation projects, and only $370 million for the MBTA upgrades. It also calls for spending up to $617 million on education initiatives.

Differences between the Senate and House version of the spending plan will need to be worked out in closed-door negotiations before a final bill lands on Healey’s desk for consideration.

Gov. Maura Healey filed a supplemental spending plan earlier this year that called for spending $8 billion over the next 10 years by leveraging proceeds from the state’s millionaires’ tax and borrowing to nearly double state funding. Healey’s plan sought $780 million specifically for the MBTA’s operations and upgrades.

The spending comes as state budget writers say revenue from the 2022 voter-approved Fair Share Amendment, which set a 4% surtax on incomes larger than $1 million, are exceeding expectations. Under the law, proceeds from the surtax can only be spent on transportation or education.

The state Department of Revenue told lawmakers during a pre-budget hearing in December that the surtax generated $2.43 billion in the previous fiscal year, exceeding original estimates. Next fiscal year, that could rise as high as $2.5 billion, revenue officials said.

The Senate has proposed spending another $1.95 billion from the millionaires tax on a range of projects and initiatives as part of its $62 billion state budget proposal, unveiled last week.

Critics of the surtax, such as the conservative Massachusetts Fiscal Alliance, argue that the levy is hurting the state’s competitiveness by siphoning away money from job creators and driving wealthy families to lower tax states such as New Hampshire and Florida.

Healey and other administration officials argue that the additional funding is proving to be crucial for supporting the state’s transportation and education needs at a time when federal funding is receding.

© 2025 the Gloucester Daily Times (Gloucester, Mass.).
Visit www.gloucestertimes.com.
Distributed by Tribune Content Agency, LLC.