BOSTON (SHNS) – Most states have already reported their year-end tax collections for the budget year that ended June 30, but Massachusetts is not among them and the delay here has now stretched longer than any point in at least 20 years.
The Department of Revenue typically has to report on the previous month’s tax collections by the third business day of the new month. But for June, the last month of the state’s fiscal year, the administration can under state law withhold the information that completes the fiscal year’s picture until “the day after the department completes the processing of June tax revenues.” DOR has already announced collections from July (the first month of fiscal 2024), but as of Monday had not released tax collection data for June or for the totality of fiscal 2023.
A spokesman for the Executive Office of Administration and Finance said he had nothing new to share Monday.
DOR has not taken this long to process June revenues in at least 20 years, according to the agency’s archive of its press releases. From 2003 through 2019, year-end tax revenues and June collections were made public in July. In 2020, which saw tax filing deadlines moved as a result of the pandemic, DOR reported preliminary year-end results on July 24. The release extended into August in the each of the last two years, coming on Aug. 3 in 2021 and on Aug. 4 in 2022.
The June revenue report will say a lot about the state’s financial picture. After adjusting for the net impact of a pass-through entity excise, DOR said in early June that tax collections 11 months into the fiscal year were running $583 million behind benchmarks used to craft the fiscal 2023 state budget.
Gov. Maura Healey has until Thursday to act on a record $56.2 billion budget for fiscal year 2024, which represents a 6.6 percent, or $3.5 billion, spending increase over the fiscal year 2023 budget as signed last summer.
A spokeswoman for the governor did not respond Monday when asked whether Healey has information on final fiscal year 2023 tax collections available to her as she reviews the fiscal year 2024 budget.
Last week, the credit rating agency Fitch Ratings said that it had analyzed collections data from the 37 states that had reported on collections for the 12 months ending with June, finding that tax revenue was down from the year before in 17 states and grew less than 1 percent in another six states.
“Most states have budgeted cautiously for the coming fiscal year, generally in line with Fitch’s expectation for a mild and brief recession beginning in late 2023,” the credit rating agency said. It added, “Looking to 2024, the abnormally high revenue growth that marked the pandemic recovery appears to be in the rearview mirror. However, prices and wages should remain above pre-pandemic levels, keeping revenues in most states elevated relative to their pre-pandemic baseline, and tax revenues will generally continue to grow from the higher baseline, albeit at a more modest pace.”
There is very little about the state budget process in Massachusetts that happens on time.
Lawmakers have not sent the governor an annual budget before the July 1 start of the new fiscal year since fiscal year 2013, more than a decade ago, according to research from the Massachusetts Taxpayers Foundation. And lawmakers in recent years have opted to wait longer and longer to pass the annual so-called closeout supplemental budget, which must be signed into law for the state comptroller to begin to prepare an annual financial report that is due by each Oct. 31. That closeout bill used to be done in August or September in the late 1990s and early 2000s, but recently has not been addressed until October or even November.