Massachusetts appears poised to avoid ending the fiscal year in the red after April tax revenues shot past already lowered projections, Administration and Finance Secretary Matthew Gorzkowicz said Friday afternoon.

Massachusetts tax collections beat April expectations by more than $1 billion, or about 19.5% above the benchmarks that Gov. Maura Healey reduced earlier this year after months of dismal returns.

The increase was largely driven by the so-called “Millionaire’s Tax” and excess capital gains. Those dollars are already set aside for other uses, which means the state does not have an extra $1 billion lying around to help balance the budget, Gorzkowicz said.

Department of Revenue officials are still figuring out exactly how much the 4% surtax on incomes over $1 million and excess capital gains played a role in April’s revenue numbers, Gorzkowicz said.

But even if the Healey administration sets aside what it believes was collected under the surtax and excess capital gains, the state is expected to end fiscal year 2024 in balance, Gorzkowicz told reporters.

Surtax dollars cannot be used to balance the budget because they are earmarked for education and transportation initiatives. State law requires officials to deposit excess capital gains revenues into Massachusetts’ rainy day fund.

Months of struggling revenues have left Beacon Hill budget writers anxiously awaiting April’s figures, which account for the largest tax collection month of the fiscal year.

Related Articles

Healey’s hiring cooldown off to bad start: $14.2M added to Massachusetts public payroll

Mass. House passes $58B budget, rejects GOP shelter reforms

House rejects attempt to move no-cost inmate calls money to local aid during budget debate

House budget debate kicks off with fiscal warnings from Democrats and Republicans

Now is not the time to let up on ‘critical investments,’ Senate Pres. tells Chamber

Healey in January slashed $375 million from the state’s fiscal year 2024 budget and lowered expectations by $1 billion in an effort to keep Massachusetts from running into the red. As poor revenues kept coming in, Healey last month put in place stricting hiring measures in an attempt to rein in costs.

The administration does not plan to reverse any of the moves it has already made and any decision to extend “hiring controls” would not be made until at least July, Gorzkowicz said.

Gorzkowicz said revenue officials are still keeping an eye on May and June, the last two months of the fiscal year, for potential revenue below benchmark collections.

Preliminary revenue collections for April totaled $6.3 billion, or about 32% more than the same time last year, according to the Department of Revenue.

Fiscal year 2024 year-to-date collections are at roughly $33.8 billion, or 4.8% more than the same period last fiscal year and 2.7% above projections set by the Healey administration.

April tax collections last year set off alarms when revenues came in $1.6 billion below what officials originally estimated the state would collect. Those numbers came as both Healey and the Legislature were in the process of working through varying tax cut proposals.

Healey later defended a $1-billion-a-year package of tax cuts in January in the face of poor revenue collections.