May 10, 2010
Secretary Jay Gonzalez
Executive Office for Administration and Finance
State House, Room 373
Boston, MA 02133
Secretary Jeffrey Mullan
Massachusetts Department of Transportation
10 Park Plaza, Room 3170
Boston, MA 02116
RE: Revision of March 1, 2010 Certification of MBTA Base Sales Tax Revenues for FY2011
Dear Secretary Gonzalez and Secretary Mullan:
Pursuant to Massachusetts General Laws Chapter 10, Section 35T, as amended by Section 3 of Chapter 86 of the Acts of 2010, I revise the certification of the base revenue amount for fiscal 2011. This certification was done in consultation with the Department of Revenue.
The base revenue amount is calculated by comparing the change in consumer price index for all urban consumers for the Boston metropolitan area as determined by the Bureau of Labor Statistics of the United States Department of Labor, to the per cent increase in gross sales tax revenues received pursuant to Massachusetts General Laws chapters 64H and I for the preceding 12 months. The preceding 12 months’ “gross sales tax revenues” is defined as sales tax receipts by taxpayers from nonexempt sales, less amounts abated, refunded, or reimbursed.
I certify to you that the base revenue amount for fiscal 2011 will be the same as the FY 2010 Figure of $767,056,684.
The amount was calculated as follows:
Inflation index for the Boston metropolitan area for calendar 2009 (annualized, non-seasonally adjusted)
Growth in gross sales tax revenues, from calendar 2008 to 2009
Allowable base revenue growth (lesser of sales tax growth or inflation index, but not less than zero or greater than 3%
Current year’s base revenue (FY 2010)
Upcoming year’s base revenue (FY 2011)
Should you have any questions on the calculation of this amount, please feel free to call me.
Martin J. Benison
Cc: Senator Stephen C. Panagiotakos, Chairman Senate Ways and Means
Representative Charles A. Murphy, Chairman House Ways and Means
Timothy Cahill, Treasurer and Receiver – General, TRE
Navjeet Bal, Commissioner of Revenue
Matthew Gorzkowicz, Undersecretary, ANF
Douglas Howgate, Senate Ways and Means Budget Director
Jeita Phillips, House Ways and Means Budget Director
Chapter 10: Section 35T. Massachusetts Bay Transportation Authority State and Local Contribution Fund
Section 35T. As used in this section, the following words shall, unless the context otherwise requires, have the following meanings:-
“Base revenue amount”, for fiscal year 2001 the amount of $645,000,000, and for each fiscal year thereafter the base revenue amount for the prior fiscal year multiplied by the inflation index for the preceding 12 months, as certified by the comptroller on March 1 of each year, beginning on March 1, 2001 as set forth in subsection (b); provided, that in no year shall the base revenue amount exceed 103 per cent of the base revenue amount applicable for the prior fiscal year; provided further, that if in any year said inflation index is less than three per cent but greater than the per cent increase in gross sales tax revenues received pursuant to chapters 64H and 64I in the preceding 12 months, excluding any portion of such taxes imposed on meals as defined in paragraph (h) of section 6 of said chapter 64H, then the base revenue amount shall be adjusted by the same percentage increase in said gross sales tax revenues or the inflation index; provided further, that if in any year the per cent increase in said gross sales tax revenues or the inflation index is zero or less, then the base revenue amount shall not be adjusted for the subsequent fiscal year.
“Dedicated sales tax revenue amount”, all monies received by the commonwealth equal to 1 per cent of the gross receipts of a sale as defined by the provisions of chapter 64H and 1 per cent 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 said chapter 64H.
“Inflation index”, the per cent change in inflation as measured by the per cent change in the consumer price index for all urban consumers for the Boston metropolitan area as determined by the bureau of labor statistics of the United States department of labor
Chapter 86 Acts of 2010
SECTION 3. Section 35T of chapter 10 of the General Laws, as appearing in the 2008 Official Edition, is hereby amended by inserting after the word “revenues”, in line 17, the following words:- or the inflation index.