BHI
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and Updates on Current Issues
Massachusetts
FY-94 tax revenues predicted to reach $10.3 billion
April 16, 1993
Massachusetts
tax revenues will be $10,306.2 million in fiscal year 1994, $153.8 million
less than predicted by Governor Weld his 1994 budget (House 1). The
Beacon Hill Institute has made this prediction on the basis of its 1993
baseline forecast of Massachusetts tax revenues. The same forecast shows
that FY 1993 tax revenues will be $9,921.1 million, $18.9 million less
than that predicted by the governor.
The institute's
baseline forecast assumes three-percent growth in real (constant-dollar)
U.S. personal income, three-percent growth in the U.S. consumer price
index and no change in Massachusetts tax policy. Table 1 provides the
results of this forecast for FY-1993-95 and of forecasts that make alternative
assumptions about the growth of real U.S. personal income and about
Massachusetts tax policy. The low- and high-growth forecasts assume,
respectively, two- and four-percent growth in real U.S. personal income
and no change in Massachusetts tax policy. The tax-hike forecast adopts
the baseline assumption concerning the real U.S. personal income but
allows for a rise in tax rates aimed at funding new state expenditures
on education. All forecasts are driven by the institute's dynamic econometric
tax model for Massachusetts.
Table
1 provides, in addition to its April 1993 forecast, the institute's
April 1992 forecast for FY 1992-95. Of note is the fact that the institute's
April 1992 forecast for FY 1992 was accurate within one percent of actual
revenues for that year. (1 ) Looking ahead to FY 1994-95, our April
1993 baseline forecast is somewhat more pessimistic than our April 1992
baseline forecast. (2)
Table
1
Taxes For Budget By Fiscal Year
($ Millions)
| |
1992 |
1993 |
1994 |
1995 |
|
BHI
April 93 Forecast
|
|
|
|
|
| Baseline |
|
9,921.10 |
10,306.20 |
10,801.10 |
| Low-Growth
Forecast |
|
9,914.90 |
10,254.90 |
10,700.00 |
| High-Growth
Forecast |
|
9,927.20 |
10,357.30 |
10,901.50 |
| Tax-Hike
Forecast |
|
9,921.10 |
10,596.00 |
11,094.90 |
| BHI
April 92 Baseline Forecast |
9,398.80 |
10,015.70 |
10,598.20 |
10,968.10 |
| House
1 Forecast |
|
9,940.00 |
10,460.00 |
|
| Actual
Amount |
9,482.30 |
|
|
|
Table
2 provides quarterly forecast of tax revenues and Massachusetts personal
income (in millions of current dollars). Personal income and tax revenue
for the second quarter of CY 1994 are expected to exceed those for the
same quarter of CY 1993 by 4.8 percent.
Table
2
BHI 93 Baseline Forecast By Calandar-Year Quarter
($ Millions)
| |
1993:2 |
1993:3 |
1993:4 |
1994:1 |
1994:2 |
| Taxes
for Budget |
2,830.70 |
2,371.50 |
2,388.90 |
2,578.50 |
2,967.30 |
| Massachusetts
Personal Income (annual rates) |
149,189.00 |
150,962.00 |
152,753.00
|
154,562.00 |
156,389.00 |
Notes
(1) Last
year, the Institute predicted $9,192 million in FY-1992 tax revenue,
expressed in constant (inflation-adjusted) dollars. Given one-percent
inflation, the nominal dollar equivalent is $9,398.8 million.
(2) This
is the result of improvements we have made in the structure of the model.
Format
revised on
11-Jul-2007 2:19 PM
|