BOSTON — Despite an ongoing revenue slump, the Massachusetts House on Wednesday packed on $45.5 million in fiscal 2017 spending.
Tax collections 10 months into the fiscal year are running nearly half a billion dollars behind budget projections and a plan to address the difficulties has yet to emerge from the Baker administration, which says it has been planning to address the situation and monitoring revenue collections.
The supplemental budget (H 3718), which surfaced from the House Ways and Means Committee Wednesday morning, was shipped by the House to the Senate early Wednesday afternoon on a 152-1 vote after House budget chief Brian Dempsey outlined its appropriations and said many states are struggling with sluggish tax collections.
One appropriation in the bill, for $15 million, is needed to enable the Department of Correction to pay its employees in June, Dempsey said. “We believe it’s important to move forward on that,” he said.
The bill also includes $14 million to pay road-clearing bills left over from the winter and $15 million to meet state human service provider contract obligations.
A $1.5 million appropriation will help ensure staffing and the timely opening of public pools run by the Department of Conservation and Recreation.
While tax collections have been trailing estimates for months, with revenue performance problems dating back to the Obama administration, Dempsey said during floor remarks that he believes sagging receipts stem from people who are waiting to make business decisions based on the assumption that Congress will pass a major tax reform bill, which is a legislative priority for President Donald Trump.
Tax collections with two months left in budget year are running $462 million below benchmarks. Income taxes are $335 million below benchmark, mostly in connection with taxes associated with returns, bills and quarterly payments, a problem that Dempsey said is evident in more than 27 states.
Sales taxes are running $39 million below projections this fiscal year, primarily in connection with motor vehicle sales. Dempsey said there has been an escalation in delinquent auto loans and that has made it much more difficult to obtain an auto loan today than it was last year.
Twenty percent of annual state tax collections are received in May and June, Dempsey said, telling colleagues that House leaders plan to work closely with the Baker administration and the Senate to “make sure that we put out a conference report that takes into consideration all of the things that we’re seeing with respect to not only the numbers that we’re seeing for the current fiscal year but how that translates into FY ’18.”