The Healey-Driscoll administration has released its inaugural budget, 8 weeks after being sworn into office. The $54.8 billion spending plan builds in ongoing tax relief, while making major new investments in several critical areas, and continues to build long-term reserves. It includes $1 billion in spending supported by income surtax revenues.

Governor Healey’s Capital Authorization Bills

On Thursday, January 19th, Governor Maura Healey filed the first capital bond bills of her Administration, totaling $1.4 billion. The first bill focuses on what the Administration identifies as the “immediate needs” of municipalities, and includes $987 million for investments in housing, public infrastructure, and economic development. The second bill includes a two-year, $400 million reauthorization of the state’s Chapter 90 program to fund improvements to local roads and bridges.

Chapter 62F of the Massachusetts General Laws establishes a limit on annual state tax revenue collections. The law, passed by an initiative petition in 1986, created a process by which actual tax collections are compared to an allowable tax revenue threshold, adjusted annually on the basis of wage and salary growth in the Commonwealth. If actual collections exceed the allowable threshold, the excess revenue is returned to eligible income tax filers in amounts proportionate to filers’ income taxes paid in the most recent tax year.

Budget leaders from the House, Senate, and Administration have agreed on a $40.410 billion consensus tax revenue figure for the fiscal year 2024 budget. Budget makers expect tax revenues to grow by $642 million (1.6 percent) over estimated FY 2023 collections of $39.768 billion. Notably, the consensus tax revenue agreement caps the use of income surtax revenues at $1 billion in the FY 2024 budget. That revenue is not included in the figures noted above. The FY 2023 tax revenue figure has also been revised upward by $151 million over the current benchmark of $39.618 billion.