July tax revenues offer some hope

Narrow FY20 deficit, provide FY21 stability

STATE REVENUE COLLECTIONS in July helped narrow the deficit for fiscal 2020 and provided some stability heading into fiscal 2021.

The Massachusetts Department of Revenue reported on Thursday that it collected nearly $4.5 billion in taxes in July, of which nearly $2.2 billion will be apportioned to fiscal 2021 (which began July 1) and $2.3 billion to fiscal 2020 (which ended June 30). The $2.3 billion is going to fiscal 2020 because it represents taxes owed for 2019; the deadline for paying those taxes was shifted from April 15 until July 15 this year because of the coronavirus pandemic.

With the infusion of the $2.3 billion, Massachusetts appears to have ended fiscal 2020 with nearly $29.6 billion in state revenues, about $721 million less than what officials had been counting on to balance the budget.

It’s unclear how big the actual state deficit is for fiscal 2020, but officials can draw on a $3.5 billion rainy day fund to close it.

As for the current fiscal year, the nearly $2.2 billion in tax revenues collected in July are $138 million, or 6.8 percent, more than what was collected in July 2019. Adjusting for some $50 million in unique deferred corporate and business taxes, the Department of Revenue said an apples-to-apples comparison between July 2020 and July 2019 would indicate revenues last month were up $88 million, or 4.3 percent, from the same time period a year ago.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

That’s relatively good news for a state still struggling with COVID-19 and operating without a formal budget for the year. The state is currently operating under a temporary three-month budget that merely extends last year’s spending plan into this year.

State budget officials have put off crafting a budget for this fiscal year until sometime this fall. They said they first wanted to see July and August state tax revenue figures and learn whether the federal government will pass another stimulus bill providing additional aid to the state.