News

Horowitz added, “What is more, our modeling suggests that even ignoring the impact of inflation we are likely to end this fiscal year with a revenue shortfall of roughly $1 billion. The decisive factor will be April collections.

Evan Horowitz, executive director of Tufts University’s Center for State Policy Analysis, and Doug Howgate, president of the Massachusetts Taxpayers Foundation, urged lawmakers to spend a specific amount of the surtax revenue annually.

Horowitz said he expects the state will collect between $38 billion and $38.5 billion in taxes over the course of fiscal year 2023, an amount “well below” the current benchmark “and even further below the expected 62F cap for this year.”

Evan Horowitz, the executive director of the Center for State Policy Analysis at Tufts University, told lawmakers it would be “safe and sensible” to budget for $750 million to $1 billion in high income tax revenue next year.

“There’s a lot of uncertainty around millionaire’s tax revenue at this stage of its implementation, which makes it risky to commit all dollars,” Horowitz said.

Horowitz also expects the policy’s implementation will lead to roughly half a billion dollars in lost income tax revenue “as taxpayers who leave the state or engage in tax avoidance will end up skirting both the millionaires tax and the state income tax.

Horowitz proposed including $750 million to $1 billion of the millionaire tax revenue in the fiscal 2024 budget and setting any additional money aside in a “savings and stabilization plan.”

Horowitz suggested that any extra revenue garnered from the surtax should be funneled into a separate savings account — similar to how the state handle revenues from capital gains.

About 0.6% of households would be hit by the new 9% rate, according to a study by the Tufts University Center for State Policy Analysis last year.