Massachusetts budget shaves revenue projections by $629M
BOSTON - Faced with poor revenue collections in the second half of the last fiscal year, state budget writers and finance officials lowered the tax revenue estimate for fiscal year 2017 by $629 million before enacting the fiscal 2017 budget, a state finance official told investors Wednesday.
Tax collections over the second half of fiscal 2016 continually fell shy of benchmarks, creating uncertainty as the administration and Legislature developed a budget for fiscal 2017.
After originally agreeing to a consensus tax revenue estimate of $26.86 billion for fiscal 2017, the Legislature reduced the estimate by about 2.34 percent to roughly $26.231 billion, according to Jennifer Sullivan, the Executive Office of Administration and Finance's assistant secretary for capital finance. The reduction corresponded to the low-end of revenue shortfall projections forecast by the Baker administration in late June.
"Based on weaker than expected revenue performance in the second half of fiscal 2016, and after consulting with the (Administration and Finance) secretary, (the Department of Revenue) and independent economists, the Legislature reduced its tax revenue estimate at the time of their enactment of the budget," Sullivan said during a conference call for Massachusetts bond holders Wednesday morning.
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