Thursday, October 1, 2020

MA FY 20 budget ends $700M in red; Legislature gears up for FY 21 budget in October

From CommonWealth Magazine we share an article of interest for Franklin:

"MASSACHUSETTS ENDED 2020 with a nearly $700 million budget gap, Gov. Charlie Baker said Wednesday, as he filed a proposed closeout budget with the Legislature.

Baker, in his filing letter, wrote that tax collections for the fiscal year that ended July 30, 2020, were $693 million below expectations, due to the COVID-19 pandemic.  

Much of this was due to lower-than-anticipated sales tax revenues, as economic activity ground to a halt from mid-March to mid-May and only gradually rebounded. Deferral of business taxes, lower gaming revenue, and lower gasoline taxes also hurt the state’s bottom line.

But somewhat surprisingly, Baker wrote that income tax collections remained largely steady – likely due to a mix of people moving to remote work and people collecting unemployment benefits, which are taxed. The state also benefited from an influx in federal coronavirus relief money. "

Continue reading the article online

From the Mass Municipal Assoc (MMA) we share an article of interest for Franklin:

"After keeping watch on the economy and state finances over the summer, the House and Senate budget committees are gearing up to attempt a full-year spending plan for fiscal 2021, which has been delayed due to uncertainties arising from the COVID-19 pandemic and the related recession.

So far this fiscal year, state spending has been governed by interim budgets to cover July 1 through the end of October. The state has made monthly payments to cities, towns and school districts, and has deducted assessments, using temporary rules that were updated in September based in part on fiscal 2020 amounts."

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