THE COMMONWEALTH OF MASSACHUSETTS
EXECUTIVE OFFICE FOR ADMINISTRATION AND FINANCE
SENATE COMMITTEE ON WAYS & MEANS
HOUSE COMMITTEE ON WAYS & MEANS
STATE HOUSE - BOSTON, MA 02133
FOR IMMEDIATE RELEASE January 12, 2010
GONZALEZ, PANAGIOTAKOS, MURPHY ANNOUNCE CONSENSUS ON FISCAL YEAR 2011 REVENUE FORECAST
BOSTON -- Administration and Finance Secretary Jay Gonzalez, Senator Steven C. Panagiotakos, (D-Lowell) chairman of the Senate Committee on Ways and Means, and Representative Charles A. Murphy (D-Burlington), chairman of the House Committee on Ways and Means, issued the following joint statement today regarding the Fiscal Year 2011 consensus revenue figure:
"Today, the Executive Office for Administration and Finance, the Senate and the House of Representatives reached accord on the consensus tax revenue figure for Fiscal Year 2011. The joint tax revenue number agreed to by the Secretary of the Executive Office for Administration and Finance and the Chairs of the House and Senate Committees on Ways and Means is $19.050 billion for Fiscal Year 2011. The figure was arrived at after the parties received testimony at the December consensus revenue hearing, at which the Department of Revenue, economists, budget watchdog groups and other participants provided information regarding Massachusetts' economy and fiscal outlook. Following the hearing, the Secretary and budget committee chairs worked together to produce a reasonable and informed forecast for next fiscal year's revenues."
Halfway through Fiscal Year 2010, we are beginning to see some signs of modest economic growth as Massachusetts and the rest of the nation begin to cycle out of the worst global recession since the Great Depression. In the middle of the range of tax revenue growth estimates projected by economists and others at the December hearing, the $19.050 billion tax revenue estimate reflects modest actual growth of 3.2 percent and baseline growth of 2.52 percent above the tax revenue estimate for Fiscal Year 2010.
Even with this projected growth in tax revenue, the Commonwealth continues to face difficult financial challenges in the year ahead. The Administration estimates the Commonwealth faces an estimated budget gap of approximately $3 billion in Fiscal Year 2011 due to the availability of less federal stimulus funds and other one-time revenues, case load pressures and inflationary growth, particularly in health care related programs. Consequently, additional cuts and other solutions will be necessary.
"It was good to hear consensus among the economists and others who testified at our hearing in December that we are turning the corner and will be back to seeing tax revenue growth in Fiscal Year 2011," said Secretary Gonzalez. "While this is good news and our estimate of modest growth in tax revenues will help, we will continue to have to make tough and thoughtful decisions necessary to balance our budget in Fiscal Year 2011 and set Massachusetts on a path towards long-term, sustainable growth."
"The consensus at this time is for some limited growth in revenue, however, the economy, especially the labor market, is still very fragile, so we need to remain cautiously optimistic," said Chairman Panagiotakos.
"While this consensus revenue estimate may begin to show the light at the end of the tunnel, the tunnel is still long; the light is still far away," said Chairman Murphy. "If this estimate proves to be correct, the state will still be operating on tax receipts below the fiscal year 2007 level and we will once again face a daunting budget deficit. Until we see real job growth in this state, our financial future will remain grim."
The Administration, Senate and House also today reached an agreement on the following off-budget transfers that are mandated in current law:
- $767 million for the MBTA
- $644 million for the School Building Assistance (SBA)
- $1.442 billion for the pension transfer, which represents full funding of the scheduled pension contribution for Fiscal Year 2011.
The total amount of off-budget transfers is $2.853 billion. Therefore, the secretary and chairpersons agree that $16.197 billion will be the maximum amount of tax revenue available for the General Appropriations Act (GAA) in Fiscal Year 2011, and will base their respective budget recommendations on that number.