The state’s economy is humming along. Unemployment is 4.2 percent, well below the national rate. The state’s gross domestic product grew at an annual pace of 2.3 percent in the first quarter, well above the national rate. And the Dow Jones Industrial Average keeps setting record highs as stocks keep gaining.

So why is Massachusetts struggling to balance its budget, adopting last-minute spending cuts to match declining estimates of tax revenues?

The truth is, no one knows for sure. Clearly, the consensus revenue forecast put together by state officials with the help of economists was off the mark. The consensus forecast, often called the benchmark, is used in crafting the state budget. It’s similar to what homeowners do when they look ahead to what their income will be over the next year and then set their spending plans accordingly.

The Baker administration announced last month that state revenues would come in $320 million to $340 million below the benchmark forecast for fiscal 2016, and $450 million to $750 million below benchmark for fiscal 2017. The downward revisions forced last-minute cuts to keep spending in line with revenues, with the governor upping the total reductions to $838 million. Even with the reductions, spending will still rise just over 2 percent in fiscal 2017.

One of the reductions was the elimination of a sales tax-free weekend, an annual rite of summer to boost retail sales and encourage people to shop in Massachusetts and not head over the border to New Hampshire. Eliminating the sales tax holiday avoided the loss of $26 million in sales tax revenue.

An Eagle-Tribune editorial says the elimination of the sales tax holiday is the canary in the coal mine for the state’s budget woes, a symbol of what can be lost if spending is not brought under control. “We are spending way beyond our means, and we have been for a long time,” the editorial says.

But the current problem is less about spending and more about faulty revenue forecasts. Many states are experiencing a downturn in revenues, a handful because of their reliance on sagging oil taxes and most because of their dependence on highly volatile capital gains tax revenues. Massachusetts falls in the latter category.

But some analysts wonder if something else might be going on. They say revenues are soft in a number of tax categories, but nothing that would explain the precipitous drop below benchmark forecasts, particularly given the overall health of the state economy. The upcoming release of tax revenues for June, the last month of the fiscal year, may provide some clues.

BRUCE MOHL

BEACON HILL

Attorney General Maura Healey clamps down on a “loophole” in the state’s assault weapons ban. (CommonWealth) Gun dealers say there has been a rush at their doors to buy the guns in question before the AG’s clampdown. (Boston Globe)

Supreme Judicial Court Justice Robert Cordy praises David Lowy at his confirmation hearing for a post on the high court. (Salem News)

Headline that is not making the governor’s day: “Baker wants to sell part of State House lawn.” It doesn’t help that the story involves a complicated matter of granting an easement for au pair suites for luxury condos. (Boston Globe)

GE, Uber, and Lyft are among the big spenders on lobbying services in the latest state filings. (Boston Herald)

Nonprofits are urging lawmakers to reject a House-approved measure that would require them to pay taxes on property they purchase and take off the tax rolls. (State House News)

MUNICIPAL MATTERS

The Worcester Housing Authority wins a $336,000 federal grant — the biggest grant awarded in the state — for its self-sufficiency program. (Telegram & Gazette)

Falmouth officials are eyeing a possible purchase of the iconic Coonamessett Inn, a longtime venue for weddings and celebrations, as a potential site for a senior center. (Cape Cod Times)

Bouncey house for grown-ups? Scituate selectmen have approved a temporary inflatable Irish pub for distilling spirits during the town’s annual Heritage Days in August. (Patriot Ledger)

WASHINGTON/NATIONAL/INTERNATIONAL

An unarmed black man lying on the pavement with his hands up is shot by police in North Miami, Florida. (Washington Post) Black clergy in Boston plan to gather today at the city’s police headquarters to praise the department for the restraint it has shown in situations where deadly force might have been used. (Boston Herald)

A federal court has ruled Texas’ voter ID law violates the Voting Rights Act and, while not tossing the entire law, ordered the state to find ways to accommodate disenfranchised minority voters who have a hard time acquiring documentation. (New York Times)

ELECTIONS

The boo birds come out for Ted Cruz, whose prime-time address at the Republican National Convention does not include an endorsement of the party’s nominee. (Boston Herald) Scot Lehigh says it underscores the fact that Republicans remain divided. (Boston Globe)

A speech writer who works for Donald Trump takes the blame for Melania Trump’s speech at the Republican convention, but says Melania knew some of the passages came from Michelle Obama’s speech eight years ago. (Associated Press) An unemployed reporter was the first to uncover the plagiarism in Trump’s speech. (Newsweek)

Trump threatens legal action against Tony Schwartz, the ghostwriter who penned The Art of the Deal, because he spoke out in a New Yorker interview, calling Trump a “sociopath” who would be danger to the world if given control of the country’s nuclear arsenal. (New Yorker)

Trump’s war on correctness is at the center of his appeal to voters. (WBUR)

Conservative columnist George Will says don’t look now but there’s a good chance Texas could go blue at the federal and some state levels in the fall. (National Review)

Tom Keane says Boston Mayor Marty Walsh’s record should spur on a lot of challengers, but he says it won’t happen. (WBUR)

BUSINESS/ECONOMY

The building boom in Boston’s Seaport has not included enough affordable housing, says Mayor Marty Walsh — though an 832-unit tower that held a “topping off” ceremony yesterday will include nearly 100 affordable units. (Boston Herald)

A commercial sawmill and wood processing company in Hopkinton has sued the town over restrictions for its hours of operations after neighbors complained of noise. (MetroWest Daily News)

EDUCATION

WGBH News reports that Boston Public Schools superintendent Tommy Chang is considering a proposal to limit admission to Boston Latin School and the city’s two other exam schools to students who attend Boston Public Schools for at least fifth and sixth grade. Chang and Mayor Marty Walsh say no such proposal exists, in draft or final form, and they insist the report is entirely erroneous. (Boston Globe)

School superintendents come and go with great frequency in Massachusetts, creating destabilizing change in many districts. (CommonWealth)

The Globe reports that sexual exploitation of students by staff at New England private schools sometimes results in expulsion of the victim or other kinds of retaliation.

Meredith Segal, an Obama and Sanders Democrat, explains why she is backing the ballot question expanding the number of charter schools in the state. (CommonWealth)

New Bedford School Committee members expressed skepticism and confusion over Superintendent Pia Durkin’s plan to revamp the adult education program by creating two administrative positions out of one. (Standard-Times)

HEALTH/HEALTH CARE

Gloucester officials make a series of changes in city regulations that would confine any medical marijuana facility to Blackburn Industrial Park. (Gloucester Times)

TRANSPORTATION

Gov. Charlie Baker documents the sorry state of the T and says the transit system is in the early stages of a turnaround. He documents waste — loads of unused cell phones and moon roofs in armored vehicles — and says the T’s pension system is in freefall. (CommonWealth) Here is the text of his complete statement.

Baker stands by South Coast Rail even as he admits the T is struggling to provide core services. (CommonWealth)

At least 50 members of Congress are calling for a federal investigation of whether subsidies from the Chinese government helped China Railroad Rolling Stock Corp. land contracts to build subway cars in Massachusetts and Illinois. US Rep. Richard Neal, who represents Springfield, where CRCC is building a factory, said he isn’t worried. (Masslive)

A federal study outlines a $1.2 billion expansion of passenger rail in the Northeast, with Springfield playing a key role as a connecting point. (Masslive)

Hingham police say a teenaged driver was arguing with a backseat passenger and not paying attention when he slammed head-on into a MBTA bus. (Patriot Ledger)

ENERGY/ENVIRONMENT

During a hearing to discuss a proposal to put 1,000 solar panels on the roof of a Fall River middle school, city and school officials revealed more than 200 panels installed on the roof three years ago have never been activated. (Herald News)

Air Force officials have expanded the search for contamination around Joint Base Cape Cod after two ponds in Mashpee showed elevated levels of pollutants similar to what has been found on the base. (Cape Cod Times)

Several members of the Central Plymouth County Water Commission say Brockton officials aren’t telling residents the truth about conserving water and that the water supply is stretched to the limits. (The Enterprise)

CRIMINAL JUSTICE/COURTS

New Bedford police say they will now pursue criminal charges against drivers who overdose behind the wheel. (Standard-Times)

MEDIA

Helen Thomas, a former White House correspondent and at one point one of the most recognizable reporters in America, dies at 92. (Washington Post)

An internal probe into sexual harassment allegations against Fox News honcho Roger Ailes uncovered at least six other alleged victims, which apparently sealed his fate. (New York Times)