By Christian M. Wade
The Salem News, Beverly, Mass.
(TNS)
BOSTON — State lawmakers have reached an agreement on a $1.5 billion spending plan that divvies up money from the millionaires’ tax and delays some of President Donald Trump’s federal corporate tax cuts.
The supplemental budget, which emerged Tuesday from House and Senate negotiations, would divert 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.
Overall, the proposal calls for spending $794 million on transportation, with the MBTA’s operations getting the largest chunk, of $595 million, for improvements and infrastructure upgrades to the agency’s fleet of buses, subway, cars and trains. Education spending would top $558 million under the proposal.
But the compromise bill also includes Gov. Maura Healey’s controversial proposal to delay implementation of several changes to the federal tax code in Trump’s One Big Beautiful Bill Act set to go into effect this year. The state stands to lose $400 million a year in federal funding from Trump’s new tax cut and policy law.
The legislation would also require the state to “pause” those federal tax cuts if voters approve a proposal to reduce the state’s income tax rate from 5% to 4%, which is inching toward the November ballot. Money from suspending the federal tax cuts would help plug any funding gaps, lawmakers said.
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Both the House of Representatives and the Senate approved versions of the spending bill over the past several months. Differences between the bills were hammered out by a six-member “conference” committee that negotiated a final proposal. The House and Senate will hold up or down votes on the measure over the next several days.
Progressive groups have called Healey and lawmakers to permanently “opt out” of changes to the federal tax code included in Trump’s One Big Beautiful Bill Act, warning that corporate tax changes in the law would force deep cuts in state spending for safety net programs.
Business groups have criticized the move to delay federal tax relief, arguing that the state should be cutting spending instead of delaying tax relief for businesses that are already struggling with high labor costs, the lingering pinch of inflation and other financial pressures.
The supplemental spending bill is the latest to tap into revenue from the 2022 voter-approved Fair Share Amendment that 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 $3.1 billion expected to be raised from the tax this fiscal year.
Another $200 million in the spending bill comes from general fund revenue collected in the previous fiscal year, according to legislative leaders.
Photo caption: Massachusetts State House in Boston (AbhiSuryawanshi/Wikimedia Commons)
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© 2026 The Salem News (Beverly, Mass.). Visit www.salemnews.com. Distributed by Tribune Content Agency LLC.
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