BOSTON — House lawmakers have advanced a more than $1.8 billion supplemental budget that earmarks more money from the millionaires tax for transportation and education programs.
The state House of Representatives voted 150-3 late Wednesday to approve legislation that would divert $1.3 billion in millionaires’ tax proceeds to provide more funding for the state’s public transit system, early and special education programs, expanded college financial aid and tuition repayment programs.
The spending bill includes “significant investments” in public transportation and education, and takes a “responsible approach that the House will continue to take as we navigate a period of significant economic uncertainty,” House Speaker Ron Mariano, D-Quincy, said.
The measure also includes Gov. Maura Healey’s controversial proposal to delay implementation of changes to the federal tax code in President Donald Trump’s “One Big Beautiful Bill” Act set to go into effect this year.
Healey’s legislation, filed in January, called for delaying implementation of what she described as the five “most costliest” changes in federal tax code created by the new law. The Democrat said the state will lose up to $400 million a year in federal funding from Trump’s new tax cut and policy law.
The House’s version of the bill would require the state to suspend federal tax cuts if state revenues drop lower than 5% over the previous fiscal year. That’s aimed at blunting the impact of a proposal to reduce the state’s income tax from 5% to 4% by 2030, which is inching toward the Nov. 5 ballot.
House Ways and Means Chairman Aaron Michlewitz said the tax changes in the bill “will help support the state’s economic competitiveness, while giving us time to absorb the expected loss in revenue.”
Overall, the largest chunk of the proposed spending in the supplemental budget is devoted to the MBTA’s operations with $740 million for improvements and infrastructure upgrades to the agency’s fleet of buses, subway, cars and trains.
Regional transportation authorities would get $25 million in new funding for facility upgrades, workforce recruitment initiatives, and other priorities.
At least $20 million is earmarked for reduced fare MBTA bus service for low income riders. In total, the bill devotes $885 million to transportation needs.
On education spending, the plan carves out $300 million for special education costs, including Circuit Breaker reimbursements to local school districts. Overall, education spending would top $417 million under the proposal.
That includes nearly $38.7 million for early education programs to help reduce a waiting list and $5.1 million for loan forgiveness initiatives to encourage high school and college students to pursue teaching careers in the state’s public school system.
Separately, the bill taps about $500 million from the state’s general fund to help cover the state’s health insurance costs, higher or more social workers and expenses related to Boston’s hosting of several World Cup matches at Gillette Stadium this summer.
House lawmakers also provided $54.4 million for county sheriffs to help plug revenue short falls in their budgets, but also requires them to provide detailed reports on how they plan to use the additional money. Sheriffs have been under scrutiny from legislative leaders who argue they are overspending.
The supplemental spending bill is the latest to tap into revenue from the 2022 voter-approved Fair Share Amendment, which set a 4% surtax on incomes larger than $1 million. Under the law, proceeds from the surtax can only be spent on transportation or education.
State revenue officials say collections from the surtax have exceeded expectations, with $2.5 billion expected to be raised from the tax this fiscal year.
Critics of the surtax argue that the levy is hurting the state’s competitiveness by siphoning away money from job creators and driving wealthy families to lower tax states such as New Hampshire and Florida.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@northofboston.com