BOSTON (SHNS) – When this fiscal year ends, budget managers expect that it will have generated about 6 percent less tax revenue for the state than the last.
But almost halfway into fiscal year 2021, state tax collections are still running ahead of the pace set in fiscal 2020 and moved even further ahead last month. The Department of Revenue said it collected $2.124 billion from Massachusetts taxpayers in November, $31 million or 1.5 percent more than what was collected in November 2019, the agency said.
Since the beginning of July, DOR has collected $11.464 billion in tax receipts for fiscal 2021 — $142 million or 1.3 percent more than had been collected during the same time period in fiscal year 2020, which was before the pandemic.
“November revenue performance was driven mostly by increases in withholding, regular sales tax, and corporate and business taxes. These increases were partly offset by decreases in non-withheld income tax, meals tax, and ‘all other’ tax,” Revenue Commissioner Geoffrey Snyder said. “The increase in withholding reflects unemployment insurance benefits and timing factors. DOR will continue to monitor these revenue categories closely in the coming months.”
November’s tax haul is among the smallest of the calendar year and DOR said the month typically generates about 6.5 percent of the state’s annual revenue. By the end of June 2021, Snyder and DOR expect state tax revenues will land somewhere between $25.918 billion and $28.387 billion.
The governor’s revised fiscal 2021 budget, which was used as a starting point for the roughly $46 billion spending plan the Legislature appears prepared to pass Friday, was built on a revised tax revenue estimate of $27.592 billion, which would represent a drop of 6.7 percent from fiscal 2020 collections.
“Month after month, state tax revenues seem to defy economic logic,” said Evan Horowitz, executive director of the Center for State Policy Analysis at Tufts University. “They’ve held up surprisingly well since the summer, despite high unemployment and real hardship. A lot could still go wrong, but the state is actually on pace to collect over $31 billion in FY21, significantly more than the $27.6 billion estimate built into the proposed budget.”