BOSTON (State House News Service) – With inflation pinching family budgets and the state sitting on historic surpluses, many Massachusetts taxpayers would qualify for one-time economic relief rebates from state government under a $500 million plan top Democrats unveiled Thursday.

Legislative leaders announced they will move to create a Taxpayer Energy and Economic Relief Fund that would pay $250 to qualifying Bay Staters who filed individual tax returns and $500 for married taxpayers who filed joint returns, a proposal the Senate’s budget chief described as a “first step” that keeps other tax relief proposals in play as the two-year session careens toward a close.

“Whether it is the rising price of gas, groceries, or summer clothes for kids, the Massachusetts Legislature has heard loud and clear that increased costs due to inflation have cut into family budgets,” House Speaker Ronald Mariano, Senate President Karen Spilka, House Ways and Means Committee Chair Aaron Michlewitz and Senate Ways and Means Committee Chair Michael Rodrigues said in a joint statement. “That is why we are proud to announce that the Massachusetts Legislature will act to establish the Taxpayer Energy and Economic Relief Fund, through which economic relief rebates for individuals and families will be issued.”

Individual taxpayers who reported earning between $38,000 and $100,000 in annual income in 2021 will be eligible. For married couples, the minimum annual income to qualify would also be $38,000 and the maximum would be $150,000.

The rebates would be issued to qualifying taxpayers by Sept. 30, lawmakers said.

In an interview with the News Service, Rodrigues said the package would cost “about $500 million,” all of which he said would come from a booming fiscal year 2022 budget surplus. He added that legislative leaders are in “active, regular discussions on providing other long-term tax relief to the citizens of the commonwealth.”

Asked which tax relief options remain on the table after months of public debate, Rodrigues replied, “Everything.”

“This is the first step,” the Westport Democrat said of the rebate plan. “This is immediate relief so that you don’t have to wait until you actually file your taxes to see relief.”

It was not immediately clear Thursday how many Massachusetts residents would qualify for the one-time payments. Those on the lowest rung of the income ladder would be ineligible because the plan as outlined requires an individual to have reported a minimum of $38,000 in annual income last year.

Rodrigues noted that the Legislature last year approved a $460 million program offering checks of $500 for lower-income Bay Staters. Through two rounds of payments, roughly 830,000 workers have received checks.

“It’s all a numbers game as far as fitting this income, these income limits in what we could afford to invest back to the taxpayers immediately, which is $500 million,” Rodrigues said.

The Senate Ways and Means chair said he expects the fiscal year 2022 surplus will come in “a little over $3 billion.” The Department of Revenue still has not yet reported its monthly tax haul for June, a figure that Rodrigues said will be “not insignificant.”

Last week, the Massachusetts Taxpayers Foundation projected the Legislature will have a $3.6 billion surplus on hand once final accounting of FY22, which ended June 30, wraps up.

Legislative leaders did not lay out a specific timeline for debating a bill creating the program, and Rodrigues said only that it would take place “before July 31.”

The proposed payments come as Bay Staters grapple with soaring inflation that has driven up the price of basic household goods and several continuous months of record gas prices. Legislative leaders previously shot down pushes to lift the state’s 24-cents-per-gallon gas tax, and while they have kept other tax relief options in play, they have moved slowly and have not yet embraced a specific plan.

Gov. Charlie Baker, who would need to sign off on any legislation creating a tax rebate program, in January proposed a $700 million package that would offer tax breaks for renters, seniors, parents and low-income workers and make changes to the estate and capital gains taxes in Massachusetts.

The Revenue Committee advanced a $600 million version of that bill last week that scrapped Baker’s proposal to decrease the short-term capital gains tax rate while keeping most of the rest of the bill intact, but the bill is expecte to evolve before it emerges for a vote.

A Baker spokesperson did not immediately respond to questions Thursday about the plan legislative leaders rolled out.