May tax revenues $30m higher than expected
Collections still lag $439m behind forecasts for year
STATE TAX REVENUES in May came in $30 million higher than expected, but that still leaves Beacon Hill officials with a $439 million revenue shortfall to deal with before the fiscal year ends at the end of the month.
The Department of Revenue reported on Monday that tax collections in May totaled $1.9 billion, which was $30 million, or 1.6 percent, higher than expected. Income tax collections were 3.2 percent higher than expected for the month, and sales and use tax collections were up 4 percent.
Still, revenues are lagging $439 million, or 1.9 percent, behind what was forecast for the fiscal year to date. Revenues were nevertheless up 1.2 percent, or $274 million, compared to the same period a year ago.
Gov. Charlie Baker, speaking to reporters before the revenue numbers were released, didn’t sound overly concerned. He said his administration would do some “nipping and tucking” to the budget to balance revenues and expenditures.
Rosenberg was less sanguine about cutting spending. “I think at some point we’re just going to have to come to grips with this. We’re nibbling around the edges by cutting here, cutting there, nipping and tucking here and there, and doing little bits of revenue here, little bits of revenue there. We have something to protect and we’re going to have to invest in that,” Rosenberg said, referring to the state’s newly acquired status as the No. 1 state in the country by U.S. News and World Report.“You’re not going to reform your way out of this problem. There’s only so much you can save through that. There needs to be additional revenues discussed, serious revenues, and the first step would be the Fair Share Tax,” he said.
The Fair Share Tax, better known as the millionaire’s tax, is a proposed constitutional amendment that would impose a surcharge on incomes over $1 million. According to Rosenberg, the surtax would provide enough funds for the state to continue investing in two of its top priorities: education and transportation.