BOSTON (WWLP) – Over the last couple of weeks, some bills have been signed into law and now we’ve learned that the Commonwealth is currently flushed with cash.
Massachusetts is on extremely strong economic footing, but what do lawmakers plan to do with the excess?
The state currently has five times as much money in its rainy day fund as it did five years ago. Massachusetts added $2.3 billion into the fund during 2022, bringing the fund to a historical high of $6.9 billion. As for the 2023 fiscal year budget that the Governor signed last month, that would put the rainy day fund on track to hit roughly $8.4 billion by next summer.
Also, the historic budget surplus that the state is seeing could trigger a 1986 voter approved law known as Chapter 62F, which set a cap on tax revenue growth. It’s predicted that this obscure law will return roughly $3 billion back to taxpayers.
In a statement, House Speaker Ron Mariano said, “The House will continue to monitor the Commonwealth’s economic environment and act in a fiscally prudent way to ensure that the long-term financial goals of Massachusetts and its residents are met.”
Both chambers are expected to pass an Economic Development bill at the end of session that included $1 billion in tax relief measures, but this obscure law made them re-evaluate how much money the state had to spend.
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. Even with the roughly $3 billion payout, the state will still close this fiscal year with a surplus of $1.9 billion.