Mass. tax take misses benchmark for 3rd month
BOSTON -- Tax collections in Massachusetts fell short of benchmarks for a third straight month, the state revenue department reported Wednesday, prompting officials to examine whether revenue projections for the current fiscal year should be thrown out.
The state Department of Revenue said preliminary estimates for September showed the state took in $8 million more than in the same month a year ago, but missed the monthly benchmark by $32 million.
Tax collections are running $95 million below projections for the first three months of the 2013 fiscal year, which started July 1.
Amy Pitter, the state's revenue commissioner, said that while nearly half of the shortfall was attributable to a shift in the timing of withholding payments, the failure to reach budget forecasts was a cause for concern.
"Over the next few days, we will be further analyzing tax collection results and updated economic forecasts in order to help the administration determine whether they should continue to rely on the current FY13 tax revenue projection for the balance of the fiscal year," Pitter said in a statement.
The state's $32.5 billion budget, signed by Gov. Deval Patrick in January, was based upon a $21.9 billion tax revenue forecast. Revising that forecast downward could, in theory, force the state to review spending priorities.
Recent reports have suggested that Massachusetts, which outperformed the nation through most of the economic downturn, may be sliding back a bit. The state experienced three consecutive months of slow or negative job growth, including a preliminary estimate of 4,800 jobs lost in August.
The editorial board of MassBenchmarks, a journal of the Massachusetts economy published by the University of Massachusetts Donahue Institute, observed recently that the state appeared to be slipping into a "lower gear." The board cited deteriorating global economic conditions that were taking a toll on the state's innovation and technology sector.
In its report Wednesday, the revenue department said income tax and withholding collections for September exceeded benchmarks, but those gains were offset by a drop in corporate and business tax collections and lower-than-expected revenues from the sales tax.