Massachusetts Gov. Deval Patrick last week announced that his administration will reassess fiscal 2010 revenue projections, as first-quarter fiscal 2010 collections totaling $4.3 billion have come in $212 million below prior expectations.
The governor said he plans to announce specific spending cuts and other measures to address the funding shortfall within the next month.
The biggest drop is in corporate and business tax receipts from July through September, which are $139 million under earlier estimates. Sales tax and personal income tax collections for the same period are $46 million and $9 million short of prior fiscal 2010 projections, respectively, according to the Department of Revenue.
September revenue collections total $1.7 billion, down $243 million from initial projections.
Due to the under-performing revenues, Patrick said his administration would recalculate its revenue projections for the rest of the fiscal year and the Executive Department of Administration and Finance would begin to make cuts in the state’s operating budget.
“Our cabinet has effectively managed through a $7 billion gap already through a series of spending cuts, layoffs and strict hiring controls, voluntary contributions from constitutional officers and quasi-independent agencies, the use of federal recovery funds and rainy-day funds, and new revenues. But today’s news means we have more to do,” Patrick said in a prepared statement.
Administration and Finance Secretary Leslie Kirwan “and her team have been working with other cabinet members and their agencies across state government to prepare for further spending cuts and other solutions,” Patrick said.
“I have directed the secretary and undersecretary Jay Gonzalez to work with the Department of Revenue, my Council of Economic Advisers, and other financial experts over the next two weeks to update the tax revenue estimates for the rest of this fiscal year. Within two weeks after that is announced, we will announce our plan to close the gap.”
