BOSTON, Mass. (WWLP)– The Executive Office for Administration and Finance says preliminary numbers show that the state will end Fiscal Year 2022 (FY22) with a $1.9 billion surplus.

According to the Department of Revenue (DOR), $41.105 billion in tax revenue was collected in FY22, a growth of around 20.5% over Fiscal Year 2021. This total is $6.7 billion above the total taxes assumed at the time the FY22 budget was enacted.

Of FY22 tax collections, per state law, a total of $1.4 billion in excess capital gains and sales tax revenue was transferred to the MBTA, the School Building Authority, and budget reserves including the Stabilization Fund. Made up of $1.1 billion in budgeted excess capital gains tax transfers and $1.2 billion in further excess capital gains revenue, a total of $2.3 billion was deposited into the Stabilization Fund during FY22, bringing its balance to a historic $6.9 billion. Another approximately $800 million was appropriated by the Legislature in two supplemental budgets, passed in February and April.

The $1.9 billion surplus is in addition to approximately $2.3 billion in American Rescue Plan Act (ARPA) Fiscal Recovery Funds that remain unallocated and available for appropriation.

This is all on the heels of lawmakers scrapping their plan for $1 billion in tax relief measures in response to an obscure law from the 1980’s known as Chapter 62F. Chapter 62F caps allowable state tax collections at a level that is tied to annual wage and salary growth. Revenue above said cap is to be returned to taxpayers through a credit.

Massachusetts Fiscal Alliance believes the state can afford to pass the legislatures tax relief plan and the payout under Chapter 62F.

“We should all be very happy that we’re going to get back the money we gave to the government, even though it doesn’t need it. But we have to remember that the speaker and the senate president have plans to give a very modest tax relief package to the middle class and they refuse to do it, they should do it, they can do it, they just don’t have a will,” said Paul Craney of Massachusetts Fiscal Alliance.

The Department of Revenue will now have to prepare a report detailing the revenue cap under Chapter 62F and how this fiscal year collections compared to it. That report is due to the auditor by September 1st and the auditor must certify it by September 20th.

The Executive Office for Administration and Finance announced Thursday that there will be approximately $3 billion in tax refunds to be paid out to taxpayers under 62F. Even with that payout, the state still closes this fiscal year with a surplus of $1.9 billion.