SPRINGFIELD, Mass. (WWLP) – High employment and a good economy have left many wondering why the state is behind in revenue collections this summer.
“The numbers for August were below our estimate, we’ve had to downgrade what we expected to take in as a commonwealth this whole year and we’re keeping our fingers crossed about September. I don’t want to sound pessimistic but we’re hopeful that there’s an improvement,” explains State Senator Don Humason.
The department of revenue reported last week that tax revenue collections of $1.7-billion in August fell $42-million shy of monthly estimates used to build the states 38.9 billion 2017 fiscal budget.
American International College Professor of economics John Rogers blames the volatility in the stock market for the revenue shortfall. “You’ve got more trading but a lot of people are probably getting losses that they are offsetting against their gains; so if they don’t have to pay taxes we’re winding up with a shortfall that could run around $1-billion,” explains Rogers.
However, State Representative Aaron Vega told 22News this isn’t necessarily a trend, and things overall are moving in the right direction. “Right now we’re seeing some of the income coming in, some of the sales coming in and some of the receipts coming in and we’re a little under benchmark but it is summer and there is often a fall push as people go back to school,” explains Vega.
Professor Rogers told 22News states must balance their budgets at the end of every fiscal year, and if it looks like they’re going to fall short, state leaders have to make cuts.