The $1 billion tax reform package is a big win for Governor Maura Healey

Governor Maura Healey announced a $742 million tax relief package while visiting the Demakes Family YMCA in Lynn.Pat Greenhouse/Globe Staff

In her first campaign television ad last year, Maura Healey promised she would “cut taxes” as governor. She called the state’s “economic health” her top priority in a gubernatorial debate. Soon after she clinched victory, she put tax reform at the top of her to-do list.

“My first act,” Healey said, “day one.”

Make that year one, it turns out. Just nine months into her tenure, the Democratic-led Legislature on Thursday sent a $1 billion tax package to Healey’s desk, giving the Arlington Democrat a victory that helps realize a central tenet of her campaign promise to drill down on pocketbook issues in office.

The bill would be the most significant piece of legislation Healey has signed as governor, outside the annual state budget, which is constitutionally required. It also would hand her a win on a key agenda item at a time her administration is juggling an array of crises, from exploding migrant homelessness and natural disasters to a dysfunctional public transit system she, too, has vowed to tackle.

The sprawling tax bill that the House passed Wednesday and the Senate approved Thursday doesn’t deliver everything Healey promised. For one, it features a scaled-down version of a child and dependent tax credit she first introduced as a candidate. Lawmakers agreed on a more modest version of a capital gains tax cut Healey argued was important to making the state more competitive.

Delivering such a sweeping bill is all the more notable given the lack of success her predecessor, Republican Governor Charlie Baker, had in securing passage of the same legacy-defining piece of legislation a year ago. Lawmakers balked at passing a tax bill after learning the state was on the hook for sending a $3 billion refund back to taxpayers.

It’s been more than two decades since the last significant tax cut, when voters — not legislators — approved a measure to slice the state’s income tax to 5 percent.

“The fact that her win came on something that is so universal, it makes it like a ‘win-plus,’ ” said Erin O’Brien, a political science professor at the University of Massachusetts Boston. “It gives her political cachet. People like to work with a winner.”

The $1 billion tax package Healey is expected to sign into law is wide-ranging, and geared to benefit low- and moderate-income residents as well as appease the business community by revamping more than a dozen existing tax credits or incentives while scaling back levies on estates and short-term investments.

It would create what legislative officials say is the most generous universal child and dependent tax credit in the country, by combining two existing credits and allowing taxpayers to eventually claim up to $440 per dependent. The bill would also reshape the estate tax, currently considered one of the nation’s strictest, by hiking the threshold at which the tax kicks in from $1 million to $2 million.

“The first tax cut in 20 years, it’s a huge win for the state, it’s a win for residents, it’s a win for business,” Healey said in an interview. “There was a reason why I made this an important part of my campaign and what I set out to do at the start of my administration.”

After little debate and several minutes of handshakes, hugs, and back-patting on the chamber floor, the House on Wednesday voted 155-1 to send the bill to the Senate. The Senate on Thursday voted 38-1 on the bill. The only “no” votes were Representative Mike Connolly, a Cambridge Democrat, and Senator Jamie Eldridge, a Marlborough Democrat, both of whom have firmly stood in the progressive camp of their party.

In a rare maneuver, Senate Republicans sought to suspend a rule that bars lawmakers from amending a bill that has been engrossed, with minority leader Bruce Tarr pushing to re-debate what he called “extremely problematic” provisions. That included one that would reshape how excess revenue is returned to taxpayers under a 40-year-old law. But Democrats soundly voted it down and moved forward to enact the bill and send it to the governor.

Helping Healey realize her campaign promise wasn’t the point of passing the tax relief package, versions of which lawmakers had debated for 20 months, said House Speaker Ronald Mariano.

“Well, she campaigned on transparency, she campaigned on a lot of things,” the Quincy Democrat said of Healey. “This is all of our goal. It’s a whole Democratic Party. You can look at that tax bill and find something in there that everyone [in the House] advocated for.”

Healey first announced her own $1 billion proposal at the Lynn YMCA in February, flanked by a single mother and a woman who talked about the significant financial stress she felt taking care of her 89-year-old father and her two teenage sons.

“This is going to give real money back to families around Massachusetts and families who are struggling,” Healey said at the time.

The real-world impact of the bill will resonate with voters, said O’Brien, the political science professor. Tax relief is something people will remember when they see their rebates, though the actual amount of relief can differ widely by taxpayer.

Low- and middle-income seniors who rent or own their home could claim a $2,400 credit, double what they currently can. An expansion of the earned income tax credit could save people anywhere from a few dozen to several hundred dollars, while after a taxpayer’s death, an estate of $2 million would receive a uniform credit of $100,000.

At the same time, Healey also played to the business community. In a compromise, the bill would cut the tax rate on short-term capital gains — profits on investments held up to a year — a measure that Healey and the House had embraced but senators and progressive Democrats disliked. One advocacy group, Act on Mass, said it was “appalling” that Healey and Democratic legislative leaders embraced what it called a “trickle-down tax cut package.”

Politically, that may actually benefit her, said Tatishe Nteta, director of the UMass Amherst Poll. Despite the assumption she is a progressive governor — and she is on social issues — helping push through the other tax cuts will help ingratiate her in the business community and buttress one of her pitches to its leaders, he said.

“One of the first things she [prioritized] when she won the governor’s office was retaining people in the state. This was her means of doing that,” Nteta said of the tax changes. “I don’t think you can read this as anything but a success.”

To some, the moment to celebrate a tax overhaul has passed. Unlike in 2022, when state revenues were supercharged and pandemic recovery was still top of mind, passing such a large spending bill in 2023 feels both risky and less relevant.

“For low-, middle-income voters, I doubt they will recognize the benefits to them in any immediate way,” said Evan Horowitz, executive director of Tufts University’s Center for State Policy Analysis. “The impacts are delayed . . . it won’t hit in the same way it would a year ago.”

That said, Horowitz noted that the overhaul of the tax credit for people who care for children or disabled adults will still make a dent in Healey’s broader affordability goals. His organization published a list of recommendations for state legislatures to maximize the impacts of tax cuts and other similar policy proposals last year, with child and dependent tax credits near the top of the list.

“Anybody who has kids gets it, and they get an amount of money that is meaningful,” he said. “It’s massively more impactful than anything else.”