November tax collections down
Revenue dip continues perplexing seesaw pattern
STATE HOUSE NEWS SERVICE
STATE REVENUE OFFICIALS collected $105 million less in taxes last month than they did in November 2015, contributing to a long-running up-and-down pattern that has flummoxed state budget writers and forced them to continually reopen and redraft state spending plans.
The Department of Revenue on Friday afternoon, three days ahead of an annual hearing on revenue projections, announced that tax collections of $9.47 billion over the first five months of fiscal 2017 are up by just $202 million over the same period last year, or 2.2 percent. The numbers come amid a period of extremely low unemployment.
After the fiscal 2016 state budget needed to be rearranged to account for overly optimistic revenue estimates, Gov. Charlie Baker and Democratic legislative leaders this spring were forced to scrap their original fiscal 2017 spending plans in favor of a more austere budget. Tax revenues faltered in July and August but rebounded in September and October. November’s below-benchmark performance means December’s performance could have more import than usual.
“Year-to-date revenues, taking into account the $51 million timing change due to the MassTaxConnect conversion, remain close to our estimates,” Revenue Commissioner Michael Heffernan said in a statement on the state’s tax collections..
In November, income tax collections were $95 million below the monthly benchmark and corporate and business taxes were $52 million below benchmark.
Fiscal year-to-date income taxes of $5.29 billion are up 1.4 percent, sales and use taxes of $2.63 billion are up 2.6 percent, corporate and business taxes of $623 million are up 11 percent and other taxes, totaling $934 million, are up 0.1 percent. Other taxes include motor fuels, cigarette, and estate taxes.
Income withholding collections in November were $71 million or 7.4 percent below the monthly benchmark and $75 million less than November 2015.
On Wednesday, Senate Ways and Means Committee Chairwoman Karen Spilka said she was “waiting with anticipation” to see November’s numbers after a “better month” in October.“Hopefully we are on an incline again, a little bit, going up instead of down,” she said. “We were doing well in 2016 until the last six months and then our revenue, the amount taken in by the Commonwealth, just went down and sales tax was one of the biggest issues.”
Members of the Joint Ways and Means Committee and the Executive Office of Administration and Finance are scheduled to gavel in their annual hearing on state revenues at 10 a.m. Monday in Rooms A-1 and A-2. State law calls on executive and legislative branch leaders to agree on a revenue estimate by Jan. 15, well ahead of the July 1 start of fiscal year 2018.