News Summary
The Massachusetts Bay Transportation Authority (MBTA) announced an $850 million allocation from the millionaire’s tax for critical infrastructure projects. This funding will enhance transportation safety and reliability and support a transition to an in-house bus maintenance program. Key initiatives include constructing a battery-electric bus facility and upgrades to the Green Line. This marks the second round of funding from the millionaire’s tax, which imposes a surtax on high earners to improve transportation and education in Massachusetts.
Boston, Massachusetts – The Massachusetts Bay Transportation Authority (MBTA) has announced plans to allocate $850 million from the millionaire’s tax for infrastructure projects aimed at enhancing safety and reliability while transitioning to an in-house bus maintenance program. This funding aims to support four major infrastructure initiatives, pivotal for the MBTA’s operational transition.
The allocation includes the construction of a battery-electric bus maintenance facility designed to service up to 200 vehicles. Additionally, it will fund upgrades on the Green Line that encompass power systems, track reconfigurations, and signal system updates. The package also allows for the procurement of new Commuter Rail locomotives and the initiation of the Widett Regional Rail Layover Facility project.
This marks the second round of funding utilized from the millionaire’s tax, also known as the Fair Share Amendment, which voters in Massachusetts approved in November 2022. An earlier allocation of $200.8 million was approved in January 2024, specifically targeting employee safety and retention.
The millionaire’s tax imposes a 4% surtax on annual incomes exceeding $1 million, with revenue earmarked for transportation improvements and education. Since its implementation, Massachusetts has generated significant surplus revenue from this tax, with collections surpassing initial expectations by approximately $3 billion, totaling around $5.7 billion. This surplus has been beneficial for financing various projects, including bridge repairs and literacy programs, as well as addressing budget deficits in the transportation system.
Implementing in-house bus repairs is projected to save the MBTA approximately $73 million, as the costs of outsourcing repairs stand at $116 million compared to $43 million for in-house work. The MBTA’s fleet of 175 buses, purchased during 2016 and 2017, is due for a mid-life overhaul, which will now be managed internally instead of being contracted out.
MBTA General Manager Phil Eng indicated that transitioning to in-house repairs represents both a short- and long-term investment aimed at enhancing the durability of vehicles and service quality while saving taxpayer funds. The transition is envisioned to be financially beneficial and foster pride within the workforce.
As part of the in-house transition, the MBTA plans to hire machinists, sheet metal workers, painters, and engineers over a four-year period, gradually servicing four buses each month. This strategic move is expected to improve service quality significantly, according to the Chief Operating Officer.
The framework for the current funding package also reflects the continued growth in the millionaire population within Massachusetts since the tax’s introduction, which contradicts previous predictions about high earners departing the state due to increased taxes. Data indicates a notable 38.6% increase in the number of millionaires from 2022 to 2024, with their collective wealth rising from $1.6 trillion to $2.2 trillion.
In fiscal 2025, Massachusetts collected approximately $2.987 billion from the millionaire’s surtax in addition to $2.439 billion from capital gains taxes. Analysts anticipate that this robust performance in tax collections may result in future budget surpluses, enhancing potential investments in public services and infrastructure improvements across the state.
Governor Maura Healey highlighted the importance of this funding in maintaining a balanced budget and delivering high-quality MBTA services. The current infrastructure projects are integral to both the short-term safety improvements and long-term reliability of the state’s transportation system.
Deeper Dive: News & Info About This Topic
- Bloomberg: Massachusetts Millionaire Tax Update
- Wikipedia: Massachusetts
- Boston Herald: Millionaires Tax Funding MBTA
- Google Search: Massachusetts Millionaires Tax
- MassLive: Tax Revenue Flood
- Google Scholar: Massachusetts Millionaires Tax
- NBC Boston: Tax Collections Rise
- Encyclopedia Britannica: Income Tax
- Nantucket Current: Millionaires in Massachusetts
- Google News: Massachusetts Tax Income
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