The fiscal 2024 state budget process will begin in earnest on Jan. 24 with the annual hearing where the Department of Revenue and other fiscal experts and economists discuss the prospects for the economy and state revenues over the second half of the current fiscal year and the fiscal year to come.

The consensus revenue hearing, convened by the governor’s budget team and the House and Senate Ways and Means committees, will start at 11 a.m. at the State House, with streaming for the public and press available through the Legislature’s website.

Following the hearing, legislative leaders and the new administration will reach agreement on a tax revenue forecast for fiscal 2024 that will be used in the governor’s budget recommendation, due to be filed by March 1, and the House and Senate budget plans, which are customarily released in April and May, respectively.

The hearing is important for municipal officials because it 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.

The previous administration committed to increasing the UGGA account at the same rate as the “consensus” projection for the growth of state tax collections. The MMA has asked Gov. Maura Healey to do the same, but has also asked that the UGGA account be increased by the same percentage as the growth in state revenues, as calculated by using the fiscal 2023 revenue projection of $39.575 billion used by the Legislature in July and comparing it to the fiscal 2024 consensus revenue projection that will be set in January. This will make certain that the state’s revenue sharing policy will capture the full year-over-year growth percentage.

At the midpoint of fiscal 2023, state tax collections continue to exceed expectations. On Jan. 5, the Department of Revenue announced that tax collections for the first six months of the fiscal year totaled $17.79 billion, or 6.5% percent above the year-to-date benchmark.

Written by