In January, Gov. Maura Healey filed a $58.1 billion budget plan for fiscal year 2025, projecting a slight increase in tax revenue growth and taking an overall belt-tightening approach to budgeting for the next fiscal year. The proposal level funds spending in many areas and utilizes a series of fund transfers and redirection to balance the budget without dipping into the Stabilization Fund, the “Rainy Day” reserve fund that closed out FY24 with a balance of $8.3 billion.

The budget proposes spending approximately $1.3 billion in surtax revenue, generated from the recent voter-approved “Millionaire’s Tax,” to be spent on transportation and education initiatives. Reiterating her support to allow for an online lottery, Gov. Healey includes authorization language for the MA Lottery Commission to move its games and products online, and to allow for the purchase of Lottery products by using a debit card. RAM continues to oppose this effort on behalf of our Lottery sellers.

In a companion supplemental budget for FY24 filed at the same time, the Governor proposed $863 million in funds be spent to continue to address the migrant crisis, directing all the money toward ongoing emergency shelter costs. Total costs for this program are expected to reach $1 billion in both FY24 and FY25. The MA House of Representatives responded to this request in March with a smaller proposed infusion of funds and additional reforms to the shelter system. This issue continues to garner significant attention on Beacon Hill.

While the Governor’s budget did not propose any new tax increases, a municipal relief package she filed does allow for a series of local option tax increases. The “Municipal Empowerment Act” would give municipalities the ability to raise certain taxes if they choose to, including:

•  An increase in the maximum local option Room Occupancy Excise tax, from 6 percent to 7% (Boston 7.5%)
•  An increase in the local option meals tax from 0.75 to 1%
•  A new local option vehicle excise tax of an additional 5%