Massachusetts Ends Fiscal 2025 with Modest Tax Growth Amid Ongoing Financial Concerns
BOSTON — Massachusetts concluded fiscal year 2025 with tax collections totaling $43.708 billion, marking a 7.1% increase from fiscal year 2024 and surpassing benchmarks by 5.1%, according to a recent report from the Department of Revenue (DOR). The growth in collections was driven by increased revenues from the income surtax, capital gains, and sales taxes, though declines in corporate and business taxes partially offset these gains.
DOR Commissioner Geoffrey Snyder highlighted that the state collected approximately $38.282 billion from various tax sources, slightly above the predicted revenues used to frame the budget. While the report offers no insights into spending for fiscal 2025, analysts believe it places Massachusetts in a favorable position as it enters fiscal year 2026, even as economic challenges loom.
Doug Howgate, President of the Massachusetts Taxpayers Foundation, noted that while the state avoided severe measures to balance its budget, the outlook still requires careful management of revenue and spending as uncertainties persist going into the next fiscal year. The state collected $4.562 billion in June alone, a 1.5% increase from the previous year.
Evan Horowitz, from Tufts University’s Center for State Policy Analysis, remarked that while the overall revenue aligns with forecasts, the state’s economic performance seems to be slowing. Growth rates for sales and income taxes were noted to be about half the typical expectations for the period.
As the state prepares to allocate surplus surtax funds, budget implications remain crucial, especially amidst anticipated federal funding cuts affecting Medicaid and food aid programs. Governor Maura Healey is expected to propose a closeout budget soon, with analysts predicting a likely surplus.
Note: The image is for illustrative purposes only and is not the original image of the presented article.
