State tax collections soar in December
Monthly revenues exceed projections by $527m
STATE HOUSE NEWS SERVICE
TAX COLLECTIONS IN DECEMBER left Massachusetts government flush with unbudgeted cash as revenues for the first half of the fiscal year have exceeded estimates by $728 million, shedding light on Gov. Charlie Baker’s decision this week to lift the hold he had put on legislative spending earmarks.
The Department of Revenue announced Thursday that the more than $3 billion in taxes collected in December exceeded projections by $527 million, or 21.2 percent, and beat last year’s mark by $517 million.
After the first six months of fiscal 2018, the state has now collected more than $12.9 billion, which is 6 percent above the benchmark and 8.1 percent, or $966 million, higher than the first half of fiscal 2017.
The news, which may have been sparked in part by seasonal shopping, came with a note of caution from Revenue Commissioner Christopher Harding.
“While the revenue numbers appear strong halfway through the fiscal year, we caution against using these results to project full year revenue growth given that some tax categories may have been affected by timing factors. We will closely monitor revenues in January and during the filing season,” Harding said.
Some of the estimated income tax payments, which beat benchmark by 153.3 percent, were likely accelerated and would come out of January and future month’s collection totals, Harding said. Withholding collections beat projections by $67 million, and Harding said that may have been due to unanticipated end-of-year bonus activity.
Income taxes of $1.97 billion in December beat the state’s benchmarks by $479 million, 32.2 percent, and came in 32.9 percent higher than last December.Sales taxes were also up 6 percent over last December.
Baker’s budget office earlier this week said preliminary December revenue totals factored into the governor’s decision to release his hold on millions of dollars in funding that had been earmarked by legislators in this year’s $39.4 billion state budget. Baker originally held back on releasing funds because he was concerned, after multiple years of stagnant revenue growth and budget crises, that the Legislature had left some areas of government underfunded.