Massachusetts state budget writers anticipate collecting $2.4 billion in revenue from a surtax on incomes exceeding $1 million, known as the "Fair Share Amendment," in fiscal year 2026. This substantial revenue will support transportation and education initiatives.
Legislative leaders and the state's top budget writer agreed to limit surtax spending in FY 2026 to $1.95 billion, approximately $650 million more than the current fiscal year's budget. Any collections exceeding this cap will be allocated to a reserve account.
The projected revenue for next year is slightly higher than the $2.2 billion generated by the 4% surtax in FY 2024. "The increase in available resources from surtax is critically important, aligning our estimates with the strong performance we saw in FY24," stated Administration and Finance Secretary Matthew Gorzkowicz.
Budget writers expect overall budget growth of 2.2% from FY 2025 to 2026, projecting total tax revenues to exceed $41 billion. Rep. Aaron Michlewitz emphasized that the agreed-upon revenue estimate will enable officials to construct a reasonable budget for the upcoming fiscal year.
In FY 2025, only $1.3 billion in surtax revenue was allocated for spending, with the remainder reserved for future use. Approved expenditures included $726 million for education and $537 million for transportation projects. Governor Healey is expected to outline her FY 2026 budget proposal, which will detail the use of surtax revenue, in her upcoming State of the Commonwealth address.