Senate considers ways to raise revenue for next year’s state budget

Taxes on short-term rentals, pot sales and millionaires are under discussion.

BOSTON (WWLP) – State revenues for this year are short of meeting lawmakers’ expectations by more than $460 million. The Senate’s Budget Committee released a $40.3 billion spending plan on Tuesday for next fiscal year, despite this year’s revenue shortfall.

“There’s recognition by all that we don’t have the revenue that we need to meet our obligations,” Senate Budget Committee Chairperson Karen Spilka said. But the Senate has a proposal that could bring more money in 2018 without raising existing taxes.

The Senate estimate the state could generate approximately $400 million in new revenue next year. But where’s the money coming from? The proposal calls for a 5 percent excise tax on short-term rentals like Airbnb, which could bring the state an estimated $18 million in new revenue.

Cities and towns could also add on an optional local tax of up to 6 percent. Under the plan, the state could take in $30 million from collecting sales tax from online retailers on Massachusetts sales.

Lawmakers are also hoping to bring in new revenue from taxes on pot sales and a possible tax on millionaires that you could see on the 2018 ballot.