Post Content

At a hearing of the Joint Committee on Ways and Means yesterday (October 8, 2009), DOR Commissioner Navjeet Bal presented testimony on revenue collections for the first quarter of the current fiscal year, and data on projections for collections going forward.

At the conclusion of her testimony, Sen. Steven Brewer (D-Barre) asked the commissioner for DOR's estimate of the shortfall, to which Ms. Bal replied, "$400 million to $600 million."

Her estimate placed DOR's view of the revenue shortfall at the higher end of the shortfall ranges presented by other economists who testified.

Many revenue forecasters, including those presenting yesterday, see signs of recovery in the economy. But the difficult part for forecasters is predicting when those signs of recovery will begin to translate into improved revenue collections, since it is widely acknowledged that a lag exists between the state of the overall economy and the health of revenue collections.

For instance, as has been previously noted in this blog,  while the national economy was showing signs of distress in late 2007, the fall off in revenue collections did not appear until September 2008. Now, while the economy looks like it is getting better, revenue collection has continued to fall. When will collections stabilize and start to improve is the question that vexes forecasters.

At this point, it is probably safer to plan for a steeper decline in revenues than may actually occur, since it is far easier to respond to a scenario of increasing revenues than it is to have to later this year cut the revenue forecast — and spending — again. The administration expects to announce its revised FY10 revenue estimate next week, with spending reductions to follow.

Written By:

Recent Posts

VIDEO: Introducing MassTaxConnect! posted on Aug 24

Take a look at our newest video introducing you to MassTaxConnect, our new, modernized online tax system. Hear from Commissioner Mark Nunnelly and several DOR employees about what to expect come November 30th when we launch MassTaxConnect for business taxpayers, practitioners, and professionals. Get an   …Continue Reading VIDEO: Introducing MassTaxConnect!

What’s New with MassTaxConnect? posted on Aug 13

MassTaxConnect for Massachusetts Business Taxpayers  Available November 30, 2015!   Things are about to get easier and faster for Massachusetts business taxpayers.  MassTaxConnect will replace WebFile for Business later this year and will feature the best of what WFB offers plus state-of-the-art enhancements to make tax   …Continue Reading What’s New with MassTaxConnect?

F.A.Q. Everything you Need to Know about the Sales Tax Holiday posted on Aug 10

Last week the state legislature passed and Governor Charlie Baker signed into law the Sales Tax Holiday that will officially suspend the state’s 6.25% sales tax for the upcoming weekend of August 15th and 16th. State policymakers have passed an annual summer’s sales tax holiday   …Continue Reading F.A.Q. Everything you Need to Know about the Sales Tax Holiday