Massachusetts’ fiscal winter isn’t on the horizon anymore. It’s already right here.
That’s the message high Beacon Hill funds writers painted Wednesday as they supplied a grim outlook for the state’s financial standing for the remainder of fiscal 12 months 2024 and outlined a slate of challenges Massachusetts may face as lawmakers craft the fiscal 12 months 2025 funds.
Senate Ways and Means Chair Michael Rodrigues stated it’s important for lawmakers in each the House and Senate to “remain clear-eyed” of declining tax revenues over the previous seven months as they look forward to the second half of the 12 months and evaluation Gov. Maura Healey’s $58 billion fiscal 2025 funds.
Considerable headwinds stay this fiscal 12 months, the Westport Democrat advised Healey and Administration and Finance Secretary Matthew Gorzkowicz, who had been testifying earlier than the Legislature’s two funds writing committees.
“As we saw just last week with January revenue collections for FY24 that are tracking well below benchmark to date, it places further stress and increasing downward pressures on the current FY24 budget. If this worrying trend continues over the second half of this fiscal year, it will require additional adjustments and solutions to bring our current budget into balance,” he stated.
January marked the seventh straight month that income collections in Massachusetts got here in beneath expectations, and the primary month that returns even tracked underneath revised estimated Healey put in place earlier this 12 months.
The Department of Revenue reported Monday that the state collected $3.5 billion in January, almost 7% or $263 million decrease than the brand new benchmarks Healey issued. The new expectations got here after Healey minimize $375 million from the fiscal 12 months 2024 funds and decreased year-end income estimated by $1 billion.
Gorzkowicz advised the Herald Tuesday that the administration isn’t at present planning extra unilateral funds cuts however didn’t rule out the transfer. And on Wednesday, Healey acknowledged the income traits in Massachusetts have “changed.”
“Several years of pandemic related federal funding have gone away. We need to manage our spending and make smart strategic choices. That’s what our budget recommendation for this year does,” Healey stated whereas defending her fiscal 12 months 2025 proposal.
But House funds author Rep. Aaron Michlewitz made clear that there are challenges in fiscal 12 months 2024 that might have an effect on planning for the subsequent fiscal 12 months.
“We are hundreds of millions of dollars behind our benchmarks despite an already $1 billion downgrade earlier this year. Winter isn’t just coming, folks, it’s already here. But we will manage our way through this difficult period the same way we manage the prosperous revenue of the previous three years,” the North End Democrat stated.