STATE REVENUE COLLECTIONS in July helped narrow the deficit for fiscal 2020 and provided some stability heading into fiscal 2021.
The Massachusetts Department of Revenue reported on Thursday that it collected nearly $4.5 billion in taxes in July, of which nearly $2.2 billion will be apportioned to fiscal 2021 (which began July 1) and $2.3 billion to fiscal 2020 (which ended June 30). The $2.3 billion is going to fiscal 2020 because it represents taxes owed for 2019; the deadline for paying those taxes was shifted from April 15 until July 15 this year because of the coronavirus pandemic.
With the infusion of the $2.3 billion, Massachusetts appears to have ended fiscal 2020 with nearly $29.6 billion in state revenues, about $721 million less than what officials had been counting on to balance the budget.
It’s unclear how big the actual state deficit is for fiscal 2020, but officials can draw on a $3.5 billion rainy day fund to close it.
As for the current fiscal year, the nearly $2.2 billion in tax revenues collected in July are $138 million, or 6.8 percent, more than what was collected in July 2019. Adjusting for some $50 million in unique deferred corporate and business taxes, the Department of Revenue said an apples-to-apples comparison between July 2020 and July 2019 would indicate revenues last month were up $88 million, or 4.3 percent, from the same time period a year ago.
That’s relatively good news for a state still struggling with COVID-19 and operating without a formal budget for the year. The state is currently operating under a temporary three-month budget that merely extends last year’s spending plan into this year.
State budget officials have put off crafting a budget for this fiscal year until sometime this fall. They said they first wanted to see July and August state tax revenue figures and learn whether the federal government will pass another stimulus bill providing additional aid to the state.