The Legislature's annual Consensus Revenue Hearing today received DOR's official revenue estimates for FY11 and FY12.
DOR Commissioner Navjeet K. Bal forecast an above benchmark collection for FY11 of between $19.589 billion and $19.681 billion, both well above the current estimate of $19.078 billion. For the coming fiscal year starting July 1, 2011, Bal estimated FY12 revenue between $20.211 billion and $20.343 billion.
Bal's testimony reviewed underlying economic conditions as well as the impact of proposed federal tax law changes. Bal also presented the Legislature's Revenue Committee with a more detailed briefing book chockful of spreadsheets and reports backing up DOR's revenue estimates.
DOR's revenue estimates were close to those offered by the Massachusetts Taxpayers Foundation ($19.632 billion for FY11 and $20.555 billion for FY12) and Economists Alan Clayton-Matthews and James Stock ($19.507 billion for FY11 and $20.269 billion for FY12), but all three were significantly lower than the estimates of the Beacon Hill Institute, which forecast $20.363 billion for FY11 and $21.365 billion for FY12.
Administration and Finance Secretary Jay Gonzalez warned that even with the improving revenue picture, Massachusetts faces a revenue shortfall of between $1 billion and $1.5 billion in FY12 due largely to the loss of federal stimulus funds.