‘Fair Share’ Millionaire Tax Continues to Exceed Expectations
Massachusetts budget planners expect to collect at least $300 million more this year – a 11 percent increase over last year’s forecast – from the 2023 Fair Share Amendment income tax surcharge on high-income taxpayers.
Under the terms of the Fair Share law that voters approved in November 2022, the additional funding will finance more statewide public transportation and education programs in the legislature’s fiscal year 2027 budget.
On Wednesday, Massachusetts Secretary of Administration and Finance Matthew Gorzkowicz, Senate Ways and Means Chair Michael Rodrigues, and House Ways and Means Chair Aaron Michlewitz announced their annual “consensus revenue forecast” for the upcoming fiscal year 2027, which will begin on July 1.
The forecast is a prelude to the Governor’s annual budget recommendation, which typically comes out in January and kicks off a months-long budget debate in the State House.
‘Fair Share’ outpaces other revenues
The new forecast from the Executive Office of Administration and Finance anticipates that the Commonwealth will collect a total of $44.9 billion in revenue this year, which includes $2.7 billion from the Fair Share surtax.
Excluding Fair Share revenues, forecasted state revenue for fiscal year 2027 is 2.4 percent higher than it was for the current fiscal year 2026.
But the forecast of $2.7 billion in Fair Share funds for 2027 is $300 million more than last year’s expectations – an 11 percent increase.
Since the Fair Share surtax went into effect at the beginning of 2023, budget writers have taken a conservative approach to their revenue forecasts to avoid spending money they don’t actually have.
In fiscal year 2024, lawmakers budgeted for only $1 billion in Fair Share revenue, but actual tax collections were $2.2 billion.
In fiscal year 2025, Fair Share tax collections surged to $3 billion, according to Executive Office of Administration and Finance officials.
Those higher-than-expected revenues flowed into reserve funds, and Governor Healey tapped some of those unspent Fair Share funds last year to help fill a $700 million deficit in the MBTA’s operating budget.
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