Connect with us

Massachusetts

Massachusetts’s ‘millionaires tax’ has already generated $1.8 billion this year, blowing past state projections – The Boston Globe

Published

on

Massachusetts’s ‘millionaires tax’ has already generated .8 billion this year, blowing past state projections – The Boston Globe


The Department of Revenue won’t certify the official amount raised until later this year. But the estimates immediately buoyed supporters’ claims that the surtax would deliver much-needed revenue for the state despite fears it could drive out some of the state’s wealthiest residents.

“Opponents of the Fair Share Amendment claimed that multi-millionaires would flee Massachusetts rather than pay the new tax, and they are being proven wrong every day,” said Andrew Farnitano, a spokesperson for Raise Up Massachusetts, the union-backed group which pushed the 2022 ballot initiative.

“With this money from the ultra-rich, we can do even more to improve our public schools and colleges, invest in roads, bridges, and public transit, and start building an economy that works for everyone,” Farnitano said.

Voters approved the measure in 2022 to levy an additional 4 percent tax on annual earnings over $1 million. At the time, the Massachusetts Budget and Policy Center, a left-leaning think tank, projected it could generate at least $2 billion a year.

Advertisement

State officials last year put their estimates slightly lower at up to $1.7 billion, and lawmakers embraced calls from economists to cap what it initially spends from the surtax, given it may be too volatile to rely upon in its first year.

So far, it’s vastly exceeded those expectations, generating nearly $1.4 billion alone last quarter, which coincided with a better-than-expected April for tax collections overall.

State officials said that they raked in $1 billion more in tax revenue overall than they had projected in April. That marked a stark reversal from earlier in the fiscal year, when collections lagged expectations for months, prompting state officials to slash spending, downgrade their revenue forecast, and, last month, freeze some state hiring.

Matt Gorzkowicz, Healey’s budget chief, said at the time that officials believe most of the unexpected revenue was generated by the “millionaires tax” and collections from capital gains, all money that state officials largely can’t use to balance the budget.

Revenue from the surtax is constitutionally mandated to go toward education and transportation initiatives, while excess revenue from capital gains must flow to the state’s emergency savings account. Nevertheless, Gorzkowicz said then that state officials believe they’re on track to close the fiscal year at the end of June in line with projections.

Advertisement

Massachusetts has struggled with residents leaving the state in recent years.

In 2021 — before the “millionaires tax” took effect — Massachusetts said goodbye to taxpayers with a collective $4.3 billion in adjusted gross income, an increase of 40 percent from the prior year, according to an analysis by the Pioneer Institute. Nearly 25,200 more tax filers moved out of Massachusetts than moved in, the data show.

A recent analysis by Boston Indicators, the research arm of the Boston Foundation found that the people moving out of Massachusetts across 2021 and 2022 were predominantly middle- and high-income earners, and college-educated.

Particularly dire: Working-age adults are leaving in droves. On net, Massachusetts lost an average of 22,631 people ages 25 to 44 across 2021 and 2022 — the largest number of any age group and a marked increase over previous years, according to the report.

Exactly why — and how much the tax environment may have contributed — wasn’t completely clear, as the state has also struggled with a housing crisis that has pushed families and others to seek more affordable locales.

Advertisement

The same analysis found that the state’s population rebounded last year, with a gain of nearly 11,500 residents from July 1, 2022, to July 1, 2023, as immigration numbers rebounded from pandemic-era lows.

“Whatever short term financial benefit the state will receive from the income surtax will be outweighed by the long-term negative effect this tax is having on the state,” said Paul Craney, a spokesperson for the conservative-leaning Massachusetts Fiscal Alliance.

Phineas Baxandall, the Mass. Budget and Policy Center’s interim president, said Monday that the take from the tax shouldn’t be shocking. A state analysis five years ago predicted that the “millionaires tax” could generate nearly $2 billion, he said, and “income has further concentrated at the top since then.”

“This isn’t surprising,” he said.

State Senator Michael Rodrigues, the state’s budget chief, said on the Senate floor Monday that excess revenue from the tax could ultimately come close to $1 billion for this fiscal year. Under language lawmakers passed last year, 85 percent of any “excess” revenue is transferred to an account reserved for one-time projects or spending, such as road maintenance, school building projects, or major public transportation work.

Advertisement

“We will not have any problems identifying those,” Rodrigues said. “As we all know, [transportation and education] are two areas of immense need.”

Material from the State House News Service was used in this report.


Matt Stout can be reached at matt.stout@globe.com. Follow him @mattpstout.





Source link

Advertisement

Massachusetts

‘That comes with a price tag’: How snow removal is busting town budgets – The Boston Globe

Published

on

‘That comes with a price tag’: How snow removal is busting town budgets – The Boston Globe


“The way we experience climate change is through extremes,” said Shel Winkley, a meteorologist at Climate Central. “All of that comes with a price tag.”

Across the region, officials are trying to figure out how to pay that price. The Massachusetts Department of Transportation has already spent more than $185 million on snow and ice removal this winter — about $20 million beyond what was spent during the “Snowmageddon” winter of 2015. State officials are weighing whether to seek aid from the Trump administration.

Providence has had to cap spending for the rest of the fiscal year after record-setting snowfall. In Boston, where officials have trimmed the snow removal budget, the city was on track to spend nearly double what it had set aside for winter cleanup — even before the February blizzard hit. Cambridge has spent $6 million, more than 10 times the placeholder amount it budgeted for winter cleanup.

“This is an additional pressure point on an already pressurized budget situation,” said Adam Chapdelaine, executive director of the Massachusetts Municipal Association. “In some communities, it’s likely going to force some hard decisions.”

Advertisement

In Edgartown, officials want to tap into budget reserves to make up the cost, a step that requires voter approval. If voters don’t support that move, it could mean raising taxes, said James Hagerty, the town administrator.

A boardwalk at the Seaport District in Boston still has some salt and ice melt deposits on the wooden boards along with some snow, on Mar. 2.David L. Ryan/ Globe Staff

Local officials said federal funding would help, but they’re not counting on it. Some worried that partisan disparities in which states have received disaster funding under the Trump administration would put Massachusetts at a disadvantage.

“We are hopeful that the state and federal government might step in to assist, but it’s just waiting at this point,” said Gregory Berman, Chatham’s director of natural resources.

The skyrocketing costs are yet another reminder that winters here don’t feel the same. New England is largely trending toward shorter and milder winters. Massachusetts has lost about 30 days of snow cover each year over the last few decades.

However, experts say the relationship between climate change and total annual snowfall is more complicated. Think of it as two competing forces. On one hand, global warming increases the amount of moisture in the atmosphere; when conditions are cold enough, this added moisture can fuel heavier snowstorms. On the other hand, rising temperatures mean that winter precipitation falls more frequently as rain than snow.

Advertisement

The data reflect this mixed picture. An analysis of historic snowfall totals by Climate Central, a nonprofit that conducts climate change research, found that annual snowfall has actually increased over the past 50 years in Boston and parts of coastal Massachusetts, while inland areas have seen declines.

Looking ahead, researchers project that the most intense storms may become even heavier, producing more snow than blizzards past. This shift may already be underway. In the past 40 years, Boston has recorded 10 snowstorms that produced at least 20 inches of snow. In the eight decades prior to that, there were just three.

These massive storms can trigger extra expenses, as municipalities have to pay for equipment rentals, contractors, and overtime for cleanup around the clock.

Julie Wormser, chief climate officer in Cambridge, said that total snowfall data surprised her.

“Based on how quickly the ocean is heating up off New England, my bet is that the next 50 years of data will reverse that snowfall trend,” she said.

Advertisement

Cities and towns in Western Massachusetts, Cape Cod, and the North Shore were hit especially hard. This winter, they received more than two feet of snow above their average.

Snowfall totals were higher compared to the seasonal average across Massachusetts from Dec. 1 to March 15.Iowa Environmental Mesonet (IEM)

On Cape Cod, Sandwich officials overspent their snow budget by $250,000, driven largely by the February blizzard. Town Manager George “Bud” Dunham said a day of minor plowing and treating roads can cost about $10,000, but major storms push that figure past $50,000. The town is still cleaning up downed brush and tree limbs.

If not for the storm, Dunham said, the town might have invested in new snow equipment or set aside funds for retired employees’ health insurance costs.

Mattapoisett, a coastal community on Buzzards Bay, also blew through its budget, spending nearly triple what officials had set aside. Still, Michael Lorenco, the administrator, said the town should be able to absorb the hit within its $37 million budget without raising taxes.

“I’m not a scientist, but towns near the coast seem to be getting more snow than they normally would in the past,” Lorenco said.

That doesn’t change the city’s responsibilities.

Advertisement

“Climate change or not,” he added, “we have to clean up the roads.”

Ken Mahan of the Globe staff contributed reporting.


Kate Selig can be reached at kate.selig@globe.com. Follow her on X @kate_selig.





Source link

Advertisement
Continue Reading

Massachusetts

Massachusetts bakery that made signature pizza trays for more than 100 years closes for good

Published

on

Massachusetts bakery that made signature pizza trays for more than 100 years closes for good



A Framingham institution that has been in business for more than a century closed its doors for the final time on Sunday.

Advertisement

Framingham Baking Company, known for its signature pizza trays, has officially shut down permanently. Crowds have been lining up around the block in the shop’s final days, with Sunday serving as their last day in business.

“That’s a wrap! Special thanks to all of our loyal customers! It was a great run. We love you!” Framingham Baking Company posted on Facebook Sunday after selling its final slices of pizza.

Founded in 1917, the bakery on Waverly Street became known for the square pizza slices.

The third-generation owners say they couldn’t find anyone to take over the business.

“We’re closing today after 109 years in business,” owner Joan Thomas said. “My grandparents, my parents, and my siblings – three generations have run this bakery.”

Advertisement

Customers explained why they were willing to wait in long lines to get their hands on some treats one more time.

“So many years of eating this pizza, and the bread, and the cookies. You had to be there for the end,” one woman said.

“My grandfather was a delivery guy for a long time. My first job was riding around with him in the van delivering to all the local restaurants. It’s tough to see it close, but it’s had an amazing run. Here for my last delivery. Bring some pizza home to my family,” another man added.

One customer waiting in line said it wasn’t just pizza the Framingham Baking Company provided, it was memories.

“Brought it to the cousins’ every birthday party, every gathering. Any time there was family there was pizza,” he said. 

Advertisement



Source link

Advertisement
Continue Reading

Massachusetts

Massachusetts’ middle-class income range is highest in US., topping out at over $200K

Published

on

Massachusetts’ middle-class income range is highest in US., topping out at over 0K


play

Your household can earn more than $200,000 a year and still be considered part of the “middle class” in Massachusetts, according to a recent study by SmartAsset.

Massachusetts ranks as the top state with the highest income range for households to be considered middle class, based on SmartAsset’s analysis using 2024 income data from the U.S. Census Bureau. The Pew Research Center defines the middle class as households earning roughly two-thirds to twice the national median household income.

Advertisement

According to a 2022 Gallup survey, about half of U.S. adults consider themselves middle class, with 38% identifying as “middle class” and 14% as “upper-middle class.” Higher-income Americans and college graduates were most likely to identify with the “middle class” or “upper-middle class,” while lower-income Americans and those without a college education generally identified as “working class” or “lower class.”

Here’s how much money your household would need to bring in annually to be considered middle class in Massachusetts.

How much money would you need to make to be considered middle class in MA?

In Massachusetts, households would need to earn between $69,900 and $209,656 annually to be considered middle class, according to SmartAsset. The Bay State has the highest income range in the country for middle-class households. The state’s median household income is $104,828.

In Boston, the range is slightly lower. Households need to earn between $65,194 and $195,582 annually to qualify as middle class, giving the city the 19th-highest income range among the 100 largest U.S. cities. Boston’s median household income is $97,791.

Advertisement

How do other New England states compare?

Massachusetts has the highest income range for middle-class households in New England. Here’s what households would have to earn in neighboring states:

  1. Massachusetts (#1 nationally) – $69,885 to $209,656 annually; median household income of $104,828
  2. New Hampshire (#6 nationally) – $66,521 to $199,564 annually; median household income of $99,782
  3. Connecticut (#10 nationally) – $64,033 to $192,098 annually; median household income of $96,049
  4. Rhode Island (#17 nationally) – $55,669 to $167,008 annually; median household income of $83,504
  5. Vermont (#19 nationally) – $55,153 to $165,460 annually; median household income of $82,730
  6. Maine (#30 nationally) – $50,961 to $152,884 annually; median household income of $76,442

Which state has the lowest middle-class income range?

Mississippi ranks last for the income range needed to be considered middle class, according to SmartAsset. Households there would need to earn between $39,418 and $118,254 annually. The state’s median household income is $59,127.



Source link

Continue Reading

Trending