Massachusetts likely to miss more revenue benchmarks this fiscal year, Healey’s budget writer says
State officials in Massachusetts could find themselves collecting less tax revenues than expected throughout fiscal year 2025, Gov. Maura Healey’s top budget writer warned in an interview Tuesday morning.
A day after the Department of Revenue released a July revenue report showing collections were down $18 million compared to the same time last year, Administration and Finance Secretary Matthew Gorzkowicz said he anticipates tax collections to face “downward exposure” for the remainder of the fiscal year.
Gorzkowicz said the potential risk of missing revenue benchmarks — which the Healey administration plans to set later this month — is one reason why the governor vetoed $317 million in spending from the fiscal year 2025 budget.
“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 told the Herald at an unrelated event in Newton.
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Department of Revenue officials reported Monday that Massachusetts collected roughly $2.6 billion in revenue in July, the first month of fiscal year 2025 and one of the smallest tax collection months of the fiscal year.
About $60 million of the July haul reflected “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,” according to revenue officials.
“I do think that folks need to pay attention to the revenue numbers,” Gorzkowicz said. “It’s not a great way to start the fiscal year.”
The revenue report was released only days after Sen. Michael Rodrigues, a Westport Democrat who serves as the chief budget writer in the Senate, warned tax collections for July were expected to be “very bad,” which he used as one reason to let Healey’s budget vetoes stand.
Gorzkowicz said Rodrigues’ statements “were warranted” at the time given the mid-month revenue report for July showed tax collections trending about 8% below the same time last year.
“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 said.
In a statement to the Herald Tuesday, Rodrigues said July tax receipts were off in comparison to last year “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 said. “So, we won’t have a clearer picture until the Department of Revenues processes the late June tax revenues.”