Yikes! State revenue still down from projections

Hey, I don't want to unduly alarm you all, but state revenues are still down. 

From State House News Service yesterday:

State officials collected less in taxes than they expected for the sixth straight month in December, putting the year-to-date haul three-quarters of a billion dollars below projections as budget-writers face a growing thicket of challenges.

The Department of Revenue announced Thursday that it brought in $3.776 billion in December, which is not only $138 million or 3.5 percent below the monthly benchmark estimate but also $82 million or 2.1 percent less than what the state collected in December 2022.

Halfway through fiscal year 2024, the state has now brought in $769 million or 4.1 percent less than the projections used to craft an annual budget featuring steep spending increases. Tax revenue has increased a hair compared to the same point one year ago -- up $60 million or 0.3 percent -- but the limited revenue growth is not lined up with expectations or Beacon Hill's appetite for spending.

No one seems to be sharing that, so I posted a PDF of that article here. The Commonwealth Beacon also has a piece up, which notes that this isn't just an FY25 projection kind of issue:

Healey in the past has resisted the idea of unilaterally cutting spending, saying any shortfall can be managed. She has pointed to the state’s financial situation, with a strong bond rating and a balance in the stabilization fund of more than $8 billion.

Healey’s secretary of administration and finance, Matthew Gorzkowicz, issued a vague statement Thursday about the revenue numbers. “Gov. Healey has directed me to evaluate any and all necessary steps that must be taken to ensure that the FY24 budget can be balanced at the end of the fiscal year,” he said. “In light of revenue collections over the first six months of the fiscal year, we are reviewing all of our options and will present the governor with a plan in short order.”

As State House News Service noted:

 Gov. Maura Healey told the News Service in mid-December that she was not considering unilateral budget cuts, known as 9C cuts because of the section of law that gives a governor that authority. At the time, actual state tax revenues had come in a cumulative $627 million or 4.3 percent less than the estimates used to craft the record $56 billion annual budget for fiscal year 2024.

"No. No, we're going to manage the situation," Healey said Dec. 13 when asked about the prospect of 9C cuts, the last round of which took place in December 2016. "Revenues are not what they have been the last few years. We recognize that. We've seen a dip."

She added, "It's also the case that we are fiscally very strong here in Massachusetts. We have a terrific bond rating. We have a record amount in the stabilization fund. And we're going to just have to plan and evaluate as we prepare our next budget. That's what we're going to do, we're going to manage the situation."

Since then, the gap between actual and projected revenue collections has grown, and the administration unveiled its projection that it will need to spend far more than usual -- $932 million in fiscal 2024 followed by $915 million in fiscal 2025 -- on emergency shelter. Healey's team will propose draining a roughly $700 million savings account to cover those costs.

And the Governor's FY 25 budget has to be filed by January 24.