Administration and Finance Secretary Michael Heffernan, Senate Ways and Means Chair Michael Rodrigues and House Ways and Means Chair Aaron Michlewitz announced a consensus revenue forecast for fiscal 2022 of $30.12 billion, representing a 3.5% increase in state tax revenue over adjusted fiscal 2021 projected revenue.

The adjusted fiscal 2021 revenue collections estimate incorporates a $700 million upgrade announced by Secretary Heffernan, based upon current year-to-date revenues and economic data.

The consensus revenue forecast is the basis on which the Baker-Polito administration, the House and the Senate will build their respective fiscal 2022 budget recommendations.

Under state law, the three budget officials convene every year to establish a joint revenue forecast by Jan. 15. As part of the process, they hold a public hearing in mid-December to receive testimony on the tax revenue outlook from the Department of Revenue, the State Treasurer’s Office, the Public Employee Retirement Administration Commission, and independent, local economists from area foundations and universities.

The consensus revenue forecast provides insights into the direction of the economy and anticipated state revenues available to fund municipal and school aid programs next year, particularly Unrestricted General Government Aid. In recent years – with the exception of fiscal 2021 – the UGGA account has increased at the same rate as the consensus projection for the growth of state tax collections.

Tax collections and the fiscal implications of COVID-19 pandemic will be closely monitored during the fiscal 2022 budget process this spring.

In a statement, Michlewitz called the consensus revenue agreement “a modest and responsible forecast.”

“Despite the pandemic,” he said, “our revenue intake continues to be better than anticipated, proving the continued resiliency of the Commonwealth’s economy.”

Of the forecasted $30.12 billion in state tax revenues for fiscal 2022, an estimated $1.516 billion is projected to be capital gains tax revenue, of which $165 million will be transferred, by statute, to the state stabilization fund and other long-term liability funds for pension and retiree health insurance costs ($16 million).

In addition, the following off-budget transfers are mandated by state law:
• $3.415 billion to the pension fund, which keeps the Commonwealth on schedule to fully fund its pension liability by 2036
• $1.174 billion for the Massachusetts Bay Transportation Authority
• $1.014 billion for the Massachusetts School Building Authority
• $25 million for the Workforce Training Fund

After these transfers, $24.327 billion will be the maximum amount of tax revenue available for the budget in fiscal 2022, absent statutory changes.