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Treasury proposes multiple tax and fee changes — from mansion tax to streaming, sports and a 40¢ 988 fee
Summary
The proposed FY‑26 budget includes a package of revenue changes estimated at roughly $1.2–1.3 billion, including increases to the realty transfer (mansion) fee, expanded sales‑tax base (digital/streaming and participatory sports), a monthly 40¢ line fee for 988, higher cannabis and gaming rates, and excises on cigarettes, drones and firearms.
The Executive budget included a range of tax and fee proposals the administration says will raise roughly $1.2–$1.3 billion and help close a projected structural gap.
Treasury described the suite of measures as a mix of recurring revenue raisers and smaller one‑time or partial‑year items. Among the proposals the administration scored or described for the committee:
• An increase to the realty transfer (“mansion”) fee with higher tiers for sales above $1 million and $2 million (Treasury estimated roughly $317 million additional revenue, with roughly $198 million coming from sales above $2 million).
• Sales‑tax base expansions to include certain digital services and streaming, participatory sports admissions/fees (examples cited: bowling alleys, batting cages, greens fees, pickleball, axe throwing), and selected services. Treasury estimated participatory sports receipts at about $20 million in FY‑26.
• A proposed monthly 40¢ per‑line fee to support 988 crisis and suicide prevention services, projected to raise about $61 million annually into the general fund; Treasury said the revenue would help support the 988 appropriation and other mental‑health services but is collected to the general fund rather than a dedicated statutory trust.
• Higher internet gaming/sports betting rates, increases to alcohol taxes, raises in cigarette and vaping taxes, a new excise on drone sales, and an excise/assessment increase on high‑value property. Treasury also proposed a warehouse truck fee and an adjusted corporate transit fee (CTF) estimate.
Lawmakers asked about distributional effects and economic competitiveness. Several members objected that proposed increases — particularly the mansion tax and added sales‑tax items — could burden working‑class families seeking local recreation or first‑time homebuyers, and asked whether analyses exist about cross‑border shopping or behavioral responses. Treasury replied the package sought recurring revenue and that policy choices are for the legislature to amend during the negotiation process.
Ending: The administration emphasized these are proposals; revenue and distributional assumptions will be revisited in negotiations and after spring filing data are available.
