Cash-flush state dilutes case for millionaires tax

Numbers-crunching aside, let’s just say that fiscal 2022 so far has been a banner year for the state treasury.

But numbers do tell the story of this embarrassment of riches, and the implications this surfeit might have on the millionaires tax referendum’s prospects.

The state collected $3.992 billion in tax revenue in September, far exceeding September 2020 and half a billion dollars more than the Baker administration was expecting to collect.

The Department of Revenue announced Tuesday that September’s haul was $848 million, 27%, more than actual collections in September 2020, and $501 million, 14.3%, above the month’s estimates.

September typically brings in about 10% of the state’s annual tax revenue, DOR said.

“September collections increased in all major tax types relative to September 2020 collections, including withholding, nonwithholding, sales and use tax, corporate and business tax, and ‘all other tax,’ ” Revenue Commissioner Geoffrey Snyder told the State House News Service.

“The increase in withholding is likely related to improvements in labor market conditions while the increase in non-withholding tax collections is due to an increase in income estimated payments. The sales and use tax increase reflects continued strength in retail sales and the easing of COVID-19 restrictions.”

Since the July 1 start of fiscal 2022, the DOR has collected $8.751 billion from residents and businesses. The year-to-date total is $1.501 billion, 20.7%, greater than actual collections during the same time period of fiscal 2021, and $525 million, 6.4%, above the administration’s year-to-date goal.

During fiscal 2021, Massachusetts state government collected $5 billion more from residents, workers and businesses than it was expecting, leading to a sizable surplus.

The $34.137 billion total for fiscal 2021 was $5.047 billion, 17.3%, above the state’s benchmark and $4.528 billion,15.3%, more than the actual amount collected in fiscal year 2020.

That $5 billion-plus fiscal 2021 total also matches the $5 billion in federal American Rescue Plan funds the state has yet to allocate.

By the time fiscal 2022 ends on June 30, DOR expects to collect $34.401 billion in tax revenue. Revenues for the month of October, which DOR said is “among the lower months for revenue collection,” are due to be announced Nov. 3.

DOR has set the monthly collection benchmark at $2.248 billion.

Given what’s already transpired, that fiscal 2022 revenue estimate might need to be revised higher.

The only people on Beacon Hill not excited by these gaudy tax receipts are the lawmakers and special-interest groups behind that so-called millionaires tax. A joint session of state lawmakers in June took a final procedural step, voting 159-41 to clear the way for the proposal to be placed on the ballot after years of prior attempts stymied by political and court battles.

At the time, the surtax appeared to have the backing of the state’s voters; a poll by Boston-based MassINC Polling Group showed that 72% supported the wealth tax.

Lawmakers have promised the estimated $2 billion in added revenue will target transportation infrastructure and public-school needs, but opponents argue the gains won’t outweigh the potential loss of job-creating entrepreneurs and relocated businesses.

That 4% surcharge on yearly income exceeding $1 million becomes less necessary — and more punitive — after each successive revenue-beating month. And if that’s the case, why should voters in the 2022 statewide elections approve that ballot question — overwhelming backed by Democrats — when the state’s awash in cash?

That’s a valid ballot question.