Saturday, January 15, 2022

CommonWealth Magazine: "State budget writers forecast continued growth in tax revenues"

"Budget officials on Friday revised upward their revenue forecast for the current fiscal year by $1.5 billion and then projected the state’s tax take would rise 2.7 percent in the next fiscal year, which begins July 1. 

The “consensus revenue” figure of $26.915 billion for fiscal 2023 agreed on by Secretary of Administration and Finance Michael Heffernan, Senate Ways and Means Chair Michael Rodrigues, and House Ways and Means Chair Aaron Michlewitz was toward the middle of the range forecasted by the state Department of Revenue at a hearing last month. 

The policymakers were swayed by economists’ predictions of a rise in revenue ($967 million) as society continues to recover from the pandemic. But those same economists, at December’s hearing, warned that there is also significant uncertainty. In the last couple of years, taxes have come in far higher than expected, mainly due to federal recovery efforts injecting large sums of money into the economy, and the state has revised its tax revenue numbers during the course of the year. "

Why share this item? 
As we get into the budget season, it really starts with the State budget when the Governor introduces his view of the budget on the 4th Wednesday of January. The Governor's numbers generally are used to determine the Chap 70 and local aid expected for Franklin which accounts for about 25-30% of our total revenue. 

Listen to the revenue calculation describe in the recent Finance Committee meeting and you'll hear how the revenue is calculated and then adjusted as the year progresses and the State finalized their budget (usually around Aug/Sep), and after Franklin gets peak at its own revenue and how those projects are coming through (or not) before setting the tax rate in December to 'close out' the budget cycle for a fiscal year.


"The annual budget process begins each year when the Governor files recommendations as a bill with the House of Representatives. Under the state Constitution, the Governor must submit a proposal by the 4th Wednesday of January or, in the event of a new term, within five weeks later. This bill is called House 1 or "House 2" depending on the year."   https://malegislature.gov/Budget/GovernorsBudget


The golden dome of the State House. (Photo by Andy Metzger)
The golden dome of the State House. (Photo by Andy Metzger)

 

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