April 1, 2011
Secretary Jay Gonzalez
Executive Office of Administration and Finance
State House, Room 373
Boston, MA 02133
Secretary Jeffery Mullan
Massachusetts Department of Transportation
10 Park Plaza, Room 3170
Boston, Massachusetts, 02116
RE: April 2011 Certification of MBTA Dedicated Sales Tax Revenues for the Fiscal Year Ending June 30, 2011
Dear Secretary Gonzalez and Secretary Mullan:
Pursuant to Massachusetts General Laws (MGL) Chapter 10, Section 35T and the Memorandum of Understanding (MOU) signed by and between our office, the Massachusetts Bay Transportation Authority (MBTA), the Department of Revenue, the Office of the Treasurer and Receiver-General of the Commonwealth, and the Executive Office for Administration and Finance, as of April 1, 2011, I am required to certify the projected dedicated sales tax revenue amount for fiscal 2011. This certification is done in consultation with the Department of Revenue. This estimate provides information provided to us by the Department of Revenue based on their fiscal 2011 “Monthly Tax Collection Benchmark Midpoint Estimates Based on the January 18, 2011 Executive Office of Administration and Finance Tax Revenue Estimate.”
Pursuant to that disclosure, estimated tax revenues for 2011 are $19.784 billion, including dedicated sales tax revenues to the MBTA in the amount of $654.75 million. This amount is $112.31 million less than the “base revenue amount” I recertified to you on May 10, 2010, in the amount of $767.06 million. Therefore I certify to you that the amount of $767.06 million, the base revenue amount, will be transferred to the MBTA for fiscal 2011. Please note that so far this fiscal year, we have transferred $53.28 million from the general fund to make up the funding shortfall between the stream of dedicated sales tax revenue and the fiscal 2011 base revenue as recertified on May 10, 2010.
The table used in the previous FY2011 certification letter was based on a November 2010 DOR FY2011 sales tax estimate (exclusive of meals tax) of $4,083,119,000. The revised table below reflects the revised estimates released in January 2011.
Fiscal Year 2011
Fiscal Year 2011
|Projected Sales and Use|
Tax Collections, Exclusive
of Meals Tax
|Percentage due to the|
Sales Tax Revenue for
FY 2011 (rounded down)
|Base Revenue as|
Recertified on May 10,
(*) As of August 1, 2009 the sales tax rate was increased from 5% to 6.25% for both regular sales and motor vehicle sales. Based on this new sales tax rate, the MBTA dedication percentage is now 16.00% (1 cent of 6.25 cents per dollar) as compared to the prior dedication percentage of 20% (1 cent of 5 cents per dollar)
(**)Pursuant to Massachusetts General Laws Chapter 10, Section 35T, as amended by Section 3 of Chapter 86 of the Acts of 2010, the FY2011 base revenue amount was recertified by the State Comptroller on May 10, 2010, which resulted in an increase in the FY2011 base revenue amount from $761,840,699 to $767,056,684.
The projected dedicated sales tax revenue amount is the amount of “monies received by the Commonwealth equal to one percent of the gross receipts of a sale as defined by the provisions of MGL chapter 64H and one percent of the sales price of a purchase as defined by the provisions of chapter 64I from that portion of the taxes imposed under the provisions of said chapters 64H and 64I as excises upon the sale and use at retail of tangible property or of services, and upon the storage, use or other consumption of tangible property or of services, including interest thereon or penalties but not including any portion of such taxes imposed on the sale of meals as defined in paragraph (h) of section 6 of chapter 64H.” Therefore, 16.0% of the sales tax (exclusive of meals tax), net of refunds and abatements, not including amounts set aside under paragraph (b) of section 10 of chapter 152 of the acts of 1997 (the “Convention Center Portion), are dedicated to the MBTA.
Any shortfall between dedicated sales tax revenue and the base revenue recertified on May 10, 2010 will be made up by quarterly transfers from the General and Highway Funds, pursuant to the MOU and Chapter 10, Section 35T(b).
Should you have any questions about the calculation of this amount, please feel free to call me.
Martin J. Benison
Cc: Senator Stephen M. Brewer, Chairman, Senate Committee on Ways and Means
Representative Brian S. Dempsey, Chairman, House Committee on Ways and Means
Steven Grossman, Treasurer and Receiver-General,
Navjeet Bal, Commissioner of Revenue
Matthew Gorzkowicz, Undersecretary, Executive Office for Administration and Finance
Douglas Howgate, Senate Committee on Ways and Means Budget Director
Jeita Phillips, House Committee on Ways and Means Budget Director