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Since December of 2021, the state has appropriated close to $8 billion in combined federal Fiscal Recovery Funds (FRF) and Fiscal Year (FY) 2021 and 2022 surplus resources to support a range of COVID recovery and economic development initiatives. Significant resources still remain, but tracking the amount and type of funds that are still available is a challenge for policymakers and the public.

This Brief outlines the recent history of FRF and surplus spending and summarizes the current status of remaining funds.

Low wages for educators in the field have left many centers without adequate professional support. In turn, according to the Massachusetts Taxpayers Foundation, the lack of qualified workers in areas of child care has cost Massachusetts families nearly $1.7 billion a year in lost wages.

Low wages for educators in the field have left many centers without adequate professional support. In turn, according to the Massachusetts Taxpayers Foundation, the lack of qualified workers in areas of child care has cost Massachusetts families nearly $1.7 billion a year in lost wages.

Doug Howgate, president of the Massachusetts Taxpayers Foundation, said Healey’s budget shows the state remains in a strong financial condition, giving the administration high marks for its tax relief plan, early education investments and what he called a “transparent approach to tracking and using surtax revenue.”

Doug Howgate, president of the business-backed Massachusetts Taxpayers Foundation, said cutting taxes, boosting spending, and socking money away is an amazing trifecta that doesn’t come around very often and makes crafting a budget a lot easier.

“You don’t normally see that unicorn,” he said. “When you get 40 percent revenue growth over a two-year period and you pass the biggest tax increase in 20 years [the millionaire tax], it makes some of those decisions a little bit easier.”

“We need to be thinking critically about the things that the state should be doing — but also very mindful that there is a state-federal partnership,” said Doug Howgate, president of the Massachusetts Taxpayers Foundation, a business-backed budget watchdog. “It’s not feasible for us to say, ‘We’re going to do everything that the feds did.’ ”

The Healey-Driscoll administration has released its inaugural budget, 8 weeks after being sworn into office. The $54.8 billion spending plan builds in ongoing tax relief, while making major new investments in several critical areas, and continues to build long-term reserves. It includes $1 billion in spending supported by income surtax revenues.

Budget leaders from the House, Senate, and Administration have agreed on a $40.410 billion consensus tax revenue figure for the fiscal year 2024 budget. Budget makers expect tax revenues to grow by $642 million (1.6 percent) over estimated FY 2023 collections of $39.768 billion. Notably, the consensus tax revenue agreement caps the use of income surtax revenues at $1 billion in the FY 2024 budget. That revenue is not included in the figures noted above. The FY 2023 tax revenue figure has also been revised upward by $151 million over the current benchmark of $39.618 billion.

Following a startling $11.5 billion surge in FY 2021 and FY 2022, tax revenues for this year and next settle into a lower and slower growth pattern as global risks escalate. MTF projects that FY 2023 revenues will top the $39.62 billion benchmark by $75 million and grow to $40.06 billion in FY 2024, an increase of $366 million or approximately 1 percent over FY 2023.