December 4, 2012

TO:         His Excellency Deval L. Patrick, Governor

                House Committee on Ways and Means

                Senate Committee on Ways and Means

                Joint Committee on Revenue


Under Chapter 29, Sections 5B and 9C of the Massachusetts General Laws, I am advising you of my determination that it is necessary to revise the estimates of revenue available to meet appropriations and other needs in the current fiscal year and that this revenue will be insufficient to meet all authorized expenditures for the fiscal year.

Based on a comprehensive review and analysis of information now available to me, the revised tax revenue forecast for FY2013 is $21.496 billion.  This revised tax revenue estimate for FY2013 represents a reduction of $515 million from the revenue estimate assumed in the fiscal year 2013 General Appropriations Act, which was based on the January 2012 consensus revenue estimate adjusted for subsequent tax law changes.  After accounting for the fact that $25 million of tax collections received were one-time settlements in excess of $10 million which have already been dedicated for certain one-time costs, the total projected budgetary revenue shortfall that must be solved is $540 million.

In accord with previously released figures, the revenue estimates exclude amounts earmarked for the Convention Center, but include off-budget allocations to MBTA forward funding, pension obligations, and school building assistance payments.  The current estimates assume that that total state sales tax revenues that are transferred to the Massachusetts School Building Authority will total $682.2 million, which is $20 million less than the original FY2013 assumption of $702 million.  The estimates also exclude cigarette tax revenues dedicated to the off-budget Commonwealth Care Trust Fund.

Detailed revenue and fund tables are attached.


Jay Gonzalez