Stanley and Lawn back $1.8B fair share budget for transit, schools

State Reps. Thomas M. Stanley and John Lawn are backing a $1.8 billion Fair Share supplemental budget that would pour hundreds of millions of dollars into public transportation and education while delaying the impact of federal corporate tax changes on Massachusetts. The House approved the bill 150-3 on March 18, sending it to the Senate. The measure was written and advanced by House leadership and the Ways and Means Committee; Stanley and Lawn supported it as members of the Democratic majority.

Stanley said using one-time Fair Share surtax revenue is essential to keep classrooms, transit systems and local organizations stable “during this time of unprecedented economic uncertainty.” Fair Share refers to the Fair Share Amendment, a constitutional amendment passed in 2022 that imposes a 4% surtax on annual income exceeding $1 million.

The $1.8 billion spending bill also establishes a schedule for the state to conform with the federal corporate tax changes passed by Congress in the One Big Beautiful Bill Act last year. When fully implemented, these changes will represent a $400 million revenue loss for Massachusetts. 

Under the state bill, the research and experimental expense deduction will be delayed one year, the deductions for the Modification of Business Interest, Depreciable Asset Expensing, and Qualified Production Properties will be delayed two years, and the Modification of Qualified Opportunity Zone Investments program will also be delayed two years. However, should the ballot question to lower the state income tax from 5% to 4% pass in November, which would result in a $5 billion revenue loss when fully implemented, Massachusetts would permanently decouple from these tax credits, preventing them from going into effect.

The $1.8 billion bill is funded in part by $1.3 billion from excess Fair Share surtax funds to invest in public transportation and education. Highlights are as follows: 

• $885 million toward transportation, including
  • $740 million toward the MBTA, with
    • $525 million going to the Deficiency Reserve
    • $125 million to the Workforce & Safety Reserve
    • $60 million to physical infrastructure with a focus on the core subway system
    • $20 million to low-income reduced fares
    • $10 million to water transportation infrastructure
  • $50 million for snow and ice costs
  • $25 million for Regional Transit Authorities workforce development
  • $30 million to fund the Sustainable Aviation Fuel Credit
  • $30 million for MassDOT Service Investments

• $417 million toward education, including
  • $150 million toward Special Education Circuit Breaker costs
  • $150 million to fund Early Education Child Care costs
  • $38.7 million for the EEC income eligibility waitlist, including $8 million for child care for providers and $7.5 million for the loan forgiveness program for providers
  • $20 million for Green SchoolWorks program to help schools with clean energy upgrades
  • $18.3 million for Financial Aid Supplements 
  • $20 million endowment match for UMass and other state colleges and universities 
  • $5.1 million for Tomorrow’s Teachers Loan Forgiveness program
  • $5 million for ESOL Services Waitlist

The bill also allocates $507 million from the General Fund, including

• $300 million for the Group Insurance Commission
• $54.4 million for sheriffs, representing half of the deficiency
• $41.6 million for DTA caseworkers
• $10 million for FIFA Boston for World Cup–related expenses

The bill also includes the following outside sections: 

• Food Donation Tax Credit: Establishes a food donation tax credit for farm businesses based on the amount of food donated to a nonprofit food distribution organization. The credit is capped at $5,000 annually per individual.
• Sustainable Aviation Fuel Credit: Allows taxpayers to take a credit against the tax imposed on fuels used for aircraft propulsion and, subject to limitation, requires the amount of credit per gallon of sustainable fuel to increase by $0.015 for each additional 1% reduction in lifecycle greenhouse gas emissions above 50%. The credit is capped at $10 million total for all cumulative tax credits over a fiscal year.
• Ratifies eight collective bargaining agreements.