In The News: Revenue

State tax collections will remain flat this fiscal year but grow at a 3.7 percent clip in fiscal 2011, according to Massachusetts Taxpayers Foundation estimates. "We see the beginning of an economic recovery but it will be slow and employment growth in fiscal 2011 will be minimal," foundation president Michael Widmer told the News Service Tuesday afternoon.

BOSTON - State tax collections will remain flat this fiscal year but grow at a 3.7 percent clip in the fiscal year that begins next July, according to Massachusetts Taxpayers Foundation estimates. "We see the beginning of an economic recovery but it will be slow and employment growth in fiscal 2011 will be minimal," foundation president Michael Widmer said.

Michael Widmer of the Massachusetts Taxpayers Foundation, who is also scheduled to testify, said the state is facing a shortfall for the current fiscal year in the hundreds of millions and a gaping $3 billion hole for the fiscal year that begins July 1.

The fiscal 2010 budget shortfall has the potential to rise to $1 billion if significant changes are not made, according to the Massachusetts Taxpayers Foundation.

State tax revenues for fiscal 2010 will total $18.279 billion, $600 million less than the $18.879 billion consensus forecast on which the 2010 state budget is based, according to Massachusetts Taxpayers Foundation's latest forecast which was presented to the chairs of the Senate and House Ways and Means Committees on October 8.

Massachusetts' tax forecasts are overly optimistic, and the state should trim its revenue estimates by at least $600 million, a fiscal watchdog said on Thursday. Michael Widmer, president of the nonpartisan Massachusetts Taxpayers Foundation, who testified at a legislative hearing, also warned of another $200 million to $300 million shortfall in Medicaid.

Outside of that Medicaid funding problem, Mr. Widmer said, his group estimates the state will see revenues from income, sales and capital gains taxes come in $600 million less than estimated for the budget signed in July. He said the recession will trim estimated income tax, sales tax and corporate excise tax revenues more than expected earlier this year.

Michael J. Widmer of the Massachusetts Taxpayers Foundation, a business-backed budget monitoring group, said, "Bottom line, we are projecting a decrease from that forecast of about $600 million dollars.''

Michael Widmer, of the Massachusetts Taxpayers' Foundation, said state revenue officials had over-estimated revenue collections by about $600 million for FY2010. In addition, he said the state faces a Medicaid shortfall of between $200 and $300 million.

"Within all of a $30 million budget not every dollar is well spent, but the larger reality is this disconnect between taxes and the need for taxes to fund programs [residents] believe in," said Michael Widmer, president of the Massachusetts Taxpayers Foundation.