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State budget writers today held an economic roundtable with key experts to discuss the economic disruption and fiscal implications of the COVID-19 pandemic on the Commonwealth.
One of the panelists, the Massachusetts Taxpayers Foundation, projected that tax collections in fiscal 2021 will drop by $4.4 billion, or 14.1 percent below the benchmark that top budget officials agreed to back in January.
The report from the foundation states that sudden and massive layoffs are pushing the unemployment rate up to nearly 18 percent in the current quarter, with 570,000 jobs expected to be lost in just three months, including many in the leisure and hospitality sectors.
At the outset of the pandemic, the foundation outlined for decision-makers a set of potential scenarios to consider, with a fiscal 2020 tax collections shortfall of between $500 million and $1 billion. The foundation also outlined some of the key non-tax revenue sources that are expected to be adversely affected by the COVID-19 pandemic, estimating at least another $100 million in revenue shortfall from those sources.
The State House News Service reported that Administration and Finance Secretary Michael Heffernan, the top budget official for the Baker administration, said that state tax collections were coming in as expected through March, but the trend is not expected to continue in April.
Heffernan said he drew hope from the fact that the state’s economy was strong and growing before the virus forced a widespread shutdown.
“We’re hoping this underlines a strong recovery, but that recovery remains uncertain,” he said, according to the State House News report.
The three-hour economic summit, originally scheduled for April 7, was convened by Heffernan, Senate Ways and Means Committee Chair Michael Rodrigues, and House Ways and Means Committee Chair Aaron Michlewitz. Most of the participants joined the meeting remotely.
The event was closed to the public, but was streamed live.
• Link to the Legislature’s website for a recording of the hearing
• Mass. Taxpayers Foundation Revised FY21 Tax Revenue Forecast – COVID-19 Pandemic (1.3M PDF)