Massachusetts Gov. Deval Patrick yesterday announced that the state anticipates receiving $19.05 billion of tax revenue in fiscal 2011, about $590 million more than officials estimate collecting in the current fiscal year.
Fiscal 2011 begins July 1. The governor’s fiscal 2011 budget proposal is due Jan. 27 and he will deliver his budget address around that time, said Cyndi Roy, spokeswoman for the Executive Office of Administration and Finance.
Massachusetts officials said they are beginning to see “modest economic growth” in the state.
The $19.05 billion tax revenue estimate for fiscal 2011 follows the administration’s announcement last week that current fiscal 2010 revenue projections are $181 million higher than October estimates.
That boost is due to better-than-expected revenue collections in the final months of 2010. The state now anticipates collecting $18.46 billion tax revenue by June 30. The stronger revenue performance is due in part to an increase of the state sales tax to 6.25% from 5%.
Fiscal 2010 will see 10 months of that additional revenue while the entire fiscal 2011 budget will benefit from the sales tax increase.
The Massachusetts Taxpayers Foundation calculates the sales tax increase will generate $150 million of additional revenue in fiscal 2011 compared to fiscal 2010. The foundation, in a Dec. 16 report, pegged fiscal 2011 revenue at a total of $18.95 billion, slightly less than the state’s $19.05 billion estimate.
The administration calculated fiscal 2011 revenue estimates along with chairs of the Senate and House committees on ways and means.
“It was good to hear consensus among the economists and others who testified at our hearing in December that we are turning the corner and will be back to seeing tax revenue growth in fiscal year 2011,” Administration and Finance Secretary Jay Gonzalez said in a prepared statement.
“While this is good news and our estimate of modest growth in tax revenues will help, we will continue to have to make tough and thoughtful decisions necessary to balance our budget in fiscal year 2011 and set Massachusetts on a path towards long-term, sustainable growth.”
In mid-October, Patrick announced a projected $3 billion deficit for fiscal 2011. That shortfall is due in part to the use of $2.25 billion of one-time revenue in fiscal 2010 and another $1.5 billion of additional spending requirements in non-discretionary accounts in fiscal 2011, according to the taxpayers foundation.
Along with its fiscal 2011 revenue projection, Administration and Finance announced that fiscal 2011 off-budget transfers will total $2.85 billion.
They include $767 million to the Massachusetts Bay Transportation Authority, the same amount as this year, $644 million to the Massachusetts School Building Authority, a $53.1 million increase compared to fiscal 2010, and $1.44 billion for the state’s pension contribution, which is an increase of $65 million. That leaves $16.19 billion of available tax revenue for the fiscal 2011 budget.