Mass. tax collections continue to roll along
Revenues up 1% through first 3 months of FY21
DESPITE ALL THE gloom and doom among budget officials on Beacon Hill, Massachusetts tax collections continue to roll along surprisingly well.
The state Department of Revenue said on Monday that tax revenues in September were down 1.4 percent compared to the same month last year, but overall through the first three months of fiscal 2021 revenues were up 1 percent to $7.27 billion.
In a cryptic press release, the Department of Revenue said income taxes withheld from paychecks and meals taxes were down, while sales taxes, motor vehicle sales taxes, and corporate and business taxes were up. The press release said September typically accounts for 10 percent of the state’s annual revenue, although it cautioned that the numbers this September were probably lower than usual because the due date for payments of certain sales, meals, and room occupancy taxes had been put off until May.
The growth in tax revenue during the first quarter of the year is fairly amazing, given the coronavirus pandemic, the shutdown of much of the state and national economy, and the resulting high unemployment.
House and Senate lawmakers have been projecting a budget shortfall of $4 billion to $6 billion this fiscal year. House Speaker Robert DeLeo was the latest state leader to make that forecast, urging Democrats and Republicans in Washington to come together and pass another stimulus package.
“Without the assistance from Washington, which hasn’t been forthcoming so far, we’re very concerned,” DeLeo said.What none of the state leaders has fully explained is how the shortfall projection can be so high if revenue numbers are keeping pace with last year. The possible answer: Either the revenue numbers are surprising everyone, or spending during the pandemic is running far above what it was last year.
Gov. Charlie Baker has provided the most detailed explanation so far, saying he expects the state to “work our way through” the current fiscal year, presumably by tapping some of the state’s $3.5 billion rainy day fund. Baker has warned that fiscal 2022, which doesn’t start until July 2021, will be the real problem. He has said more funding from Washington will be needed if the state is to weather shortfalls expected then.