WWLP 22 News, September 2020
A new estimate of tax collections this fiscal year suggests receipts won’t fall as far as some experts predicted in the spring, but will still leave lawmakers with a big budget challenge. In April, forecasters told lawmakers to anticipate fiscal 2021 collections would tumble by between $4 billion and $6 billion, but an updated projection produced for the News Service by the Center for State Policy Analysis at Tufts University suggests a nearly $1.6 billion reduction in anticipated tax revenues.
Evan Horowitz, executive director of the Center for State Policy Analysis at Tufts University, said the model used by the center relies on U.S. gross domestic product projections and was used in early spring to project a $700 million revenue gap for fiscal 2020, a figure that appears to roughly match the latest estimates. That gave Horowitz more confidence in the model’s accuracy, he said.
Horowitz ran the model again using fiscal 2021 GDP projections. If those projections hold up, he said, the state could reasonably expect to collect $29.6 billion in tax revenues this fiscal year, down from the state’s existing and still unrevised prepandemic estimate of $31.15 billion.
“So that would put tax revenues about $1.5 to 1.6 billion below that expectation, which is obviously not great but also not in the higher range of deficit estimates and not outside the universe of what could be filled with money from federal aid should that happen, or the rainy day fund,” Horowitz said. “At this point, with the knowledge that we have, this is the estimate that makes sense.”