(Boston, MA) – The Beacon Hill Institute (BHI) estimates that Massachusetts state tax revenues will come in at $30.242 billion in Fiscal Year 2020, 1.9% above FY 2019. For FY 2021, revenues will be $30.476, a mere .8% above FY 2020.
William F. Burke, BHI Director of Research, will present the forecast in testimony before the Joint Committee on Ways and Means on December 4, 2019 at 10 a.m. at the Gardner Auditorium. The legislature uses the BHI estimate, along with estimates provided by other groups, to help determine the revenues needed for the upcoming state budget.
“The Commonwealth has enjoyed solid revenue growth over the past few years but the flow will mostly likely taper off in the near future,” noted Frank Conte, who co-authored the Institute’s estimate.
In FY 2021, personal income taxes will rise modestly by 1.5 percent and sales tax revenue will increase by 1.5 percent. However, corporate income tax will fall by 1% and the ever-volatile business excise tax revenue will be flat.
The state will see variation in taxes such as cannabis and vaping products. The DOR expects new vaping product bans will diminish revenue by $1.49 million in FY 2020.
“As with the nation, Massachusetts faces uncertainty with the current disputes over trade. Exports are critical to the state’s industries with Canada, Mexico and China reigning as the top three destinations for the bulk of $27 billion in Massachusetts goods,” remarked Conte, “These top three nations have been at the center of trade deal restructuring in the form of the United States-Mexico-Canada Agreement USMCA (the “new” NAFTA) and the recent imposition of tariffs on Chinese goods.”
