Massachusetts finished fiscal 2017 with a revenue gap of $431 million, in the range of what Gov. Charlie Baker said would be “reasonably manageable” to balance the books on last year’s budget.
Tax revenue collections fell $431 million less than anticipated. This figure is 1.7% below the yearly benchmark for the budget, according to the state Department of Revenue.
The state, however, collected $25.63 billion in fiscal 2017 a 1.4% increase from the previous year.
House and Senate budget writers project that 3% growth is necessary in 2018 to hit the $26.42 billion in tax collections for 2018 to support planned spending. The current growth rate is smaller.
The commonwealth reported a strong June, collecting $2.72 billion, or $9 million above the monthly benchmark and 3.1% more than what was collected in June 2016.
For the year, Massachusetts collected $14.67 billion in income taxes while the state was able to take in $6.21 billion in sales and use tax collections. The income tax collections are $291 million below the benchmark while sales and use tax collections were $19 million above the benchmark.
Withholding collections totaled $11.97 billion which was 0.2% above the benchmark.
Income tax payments came in it at $1.93 billion -- $235 million or 10.9% under the benchmark.
Last week, Republican Baker vetoed $320 million from the proposed $40 billion budget the legislature sent him. His vetoes bring the final number on the proposed budget to $39.4 billion.
Lawmakers can override Baker’s vetoes with two-thirds majorities in both chambers.
