State sees increase in tax revenue

  • The Massachusetts State House in Boston

State House News Service
Published: 3/21/2017 5:28:34 PM

BOSTON — There’s a temporary pause in the spate of news about disappointing tax revenue growth levels.

Collections over the first half of March are up 9.8 percent, or $124 million compared to the same period in 2016, according to a letter to lawmakers from Revenue Commissioner Michael Heffernan.

The $1.38 billion collected through March 15 brings fiscal year-to-date tax collections up to $17.235 billion. That’s plus $429 million or 2.6 percent but shy of the growth rate lawmakers and Gov. Charlie Baker are relying on to back up their annual budget and midyear spending plans.

The biggest state tax sources, the income tax and sales and use taxes, are up 3.2 percent and 2.8 percent, fiscal year-to-date, respectively.

Heffernan cautioned that March revenues are weighted toward the end of the month and advised against using mid-month numbers to predict trends.

“March is a mid-size month for revenue collections, ranking #6 of the 12 months in each of the last eight years,” Heffernan wrote in his letter, dated Monday. “The filing season for individual income taxes is well underway in March, which is reflected in the amount of refunds flowing out during the full-month period. Corporate and business tax payments are due in the month.”

State tax collections in January of $2.7 billion were up 4.4 percent over January 2016. February collections of $1.18 billion were down 7.5 percent.

On the heels of lowered projections and unilateral budget cuts in December, receipts through February trail the fiscal year benchmark by $134 million.

While tax collections are tracked with precision, the Baker administration, like its predecessors, does not maintain a publicly available metric to track spending throughout the year.

Perhaps more so than previously, administration officials and Democrats who run the Legislature are monitoring public policy and budget talks in Washington where Republicans are making a push to shrink the federal bureaucracy and rein in programs that deliver funding to the states.

Baker’s fiscal 2018 budget includes an expected $11.437 billion in federal revenue. Federal funding accounts for about 28 percent of Baker’s $40.5 billion spending plan. The amount of federal dollars in the state budget has grown in recent years, rising from $7.971 billion or nearly 26 percent of the $30.975 billion budget in fiscal 2012.


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