REVENUE DEPARTMENT OFFICIALS on Wednesday said collections in September were 1 percent above the monthly benchmark target, but cautioned that the state is hardly out of the woods financially because tax payments continue to lag estimates.
The September report showed collections totaled $2.74 billion, which was $189 million, or 7.4 percent more, than the same month a year ago and $26 million, or 1 percent, above the monthly benchmark. Through the first three months of the fiscal year, revenues are lagging $11 million, or 0.2 percent, behind estimates.
September is one of the state’s largest tax collection months, with quarterly estimated payments due for most individuals and businesses. Analysts, many of whom have been stumped as to why tax revenues are lagging when the Massachusetts economy seems to be strong, have said September collections would play a key role in helping state officials determine whether mid-year budget cuts are necessary.
“Three months into the fiscal year, we continue to see lower-than-expected collections in sales tax and estimated payments,” said Revenue Department Commissioner Michael Heffernan. “The sales tax collections reflect an adverse trend that began early in calendar year 2016. Withholding rebounded from several months of lower-than-expected growth, although some of the recovery from last month reflects one-time events.”
Several types of taxes brought in less money than expected in September. Income tax collections were $11 million below the benchmark target and income tax estimated payments were off $85 million. Sales and use taxes were $18 million off the benchmark target.
Withholding collections were $70 million above benchmark, although the Revenue Department said the increase was due to one-time business tax events that are not expected to continue in the future. Corporate and business taxes were $43 million above the monthly benchmark.