State officers in Massachusetts might discover themselves amassing much less tax revenues than anticipated all through fiscal yr 2025, Gov. Maura Healey’s prime finances author warned in an interview Tuesday morning.
A day after the Division of Income launched a July income report exhibiting collections have been down $18 million in comparison with the identical time final yr, Administration and Finance Secretary Matthew Gorzkowicz stated he anticipates tax collections to face “downward exposure” for the rest of the fiscal yr.
Gorzkowicz stated the potential threat of lacking income benchmarks — which the Healey administration plans to set later this month — is one purpose why the governor vetoed $317 million in spending from the fiscal yr 2025 finances.
“We’ve taken action to try to create some space and give ourselves a little bit of room to be able to navigate what will be some below benchmark performance, which I think we’ll see more of throughout the fiscal year,” Gorzkowicz instructed the Herald at an unrelated occasion in Newton.
Division of Income officers reported Monday that Massachusetts collected roughly $2.6 billion in income in July, the primary month of fiscal yr 2025 and one of many smallest tax assortment months of the fiscal yr.
About $60 million of the July haul mirrored “a shift in collections between months because of timing, without which July 2024 revenue would be about $78 million or 2.9% less than actual collections in July 2023,” based on income officers.
“I do think that folks need to pay attention to the revenue numbers,” Gorzkowicz stated. “It’s not a great way to start the fiscal year.”
The income report was launched solely days after Sen. Michael Rodrigues, a Westport Democrat who serves because the chief finances author within the Senate, warned tax collections for July have been anticipated to be “very bad,” which he used as one purpose to let Healey’s finances vetoes stand.
Gorzkowicz stated Rodrigues’ statements “were warranted” on the time given the mid-month income report for July confirmed tax collections trending about 8% under the identical time final yr.
“I think the mid-month report showed that we were going to be down almost $87 million. And I think given where we were at that point in time, it had the potential of being even greater than that. So I think his concerns are warranted, and I think were appropriate at the time,” Gorzkowicz stated.
In an announcement to the Herald Tuesday, Rodrigues stated July tax receipts have been off compared to final yr “as we expected.”
“While July is typically a lower revenue month, it is troubling in that advanced tax payments, usually factored in the following month, are not considered in the last fiscal month of the year,” he stated. “So, we won’t have a clearer picture until the Department of Revenues processes the late June tax revenues.”
