REVENUE STORM BUILDS ON HILL
Gov. Maura Healey’s administration does not plan on further downgrading revenue expectations through June nor slashing additional dollars from the budget, the governor’s top finance official said yesterday, a day after January revenues reportedly tanked below already lowered benchmarks.
But Administration and Finance Secretary Matthew Gorzkowicz did not rule out more budget reductions down the road even as he said there was no “exercise underway” to implement what are known as 9C cuts, a unilateral move the governor can make to balance the state’s budget.
“We’re constantly looking at all of our options. It’s always a tool in the toolbox. I would never want to throw a tool away. I’m not one to throw any of our tools away. But there’s no plan at the moment. There’s no exercise underway to do more 9C cuts, but you never say never,” Gorzkowicz told the Herald at the State House.
The Department of Revenue reported Monday that Massachusetts collected $3.5 billion in January, nearly 7% or $263 million lower than the revised expectation Healey issued in January after months of below benchmark tax collections.
Healey cut $375 million from the fiscal year 2024 budget and found another $625 million to help balance out the budget after reducing the year-end revenue estimate by $1 billion. But even with those actions, Massachusetts again finds itself in a tough financial situation.
Department of Revenue Commissioner Geoffrey Synder said January collections decreased in income tax withholding, non-withheld income tax, corporate and business tax, and “all other” tax when compared to the same time last year.
The decreases, Synder said, were partially offset by an increase in sales and use tax.
“These decreases were partially offset by an increase in sales and use tax. The decrease in non-withheld income tax was driven by lower income tax estimated and return payments and an unfavorable increase in income tax refunds. The decrease in withholding was mainly due to typical timing factors in collections,” Snyder said in a Monday statement.
Massachusetts Republican
Party Chair Amy Carnevale said the recurring pattern of missed revenue targets in fiscal year 2024 is “increasingly worrisome with each passing month.”
“A shortfall of $263 million is significant. This stark reality directly stems from the shortcomings of failed policies which not only strain the budget but also contribute to the exodus of residents from Massachusetts,” Carnevale said in a statement.