On December 4th, Secretary of Administration and Finance Matthew Gorzkowicz,
Senate Ways and Means Chair Michael Rodrigues and House Ways and Means Chair Aaron Michlewitz hosted the annual public hearing with key experts as they begin work to formulate a consensus tax revenue estimate for the Commonwealth's Fiscal Year 2025 (FY2025) budget. The consensus tax revenue estimate serves as the foundation for the upcoming fiscal year budget, which begins July 2024.
At the hearing, the general message was that FY2025 revenue would increase modestly, with Department of Revenue Commissioner Geoffrey Snyder projecting tax revenue growth of between 1.7 percent and 3.2 percent. The Massachusetts Taxpayers Foundation had a similar projected revenue growth range for FY2025, estimating a 2.4% growth rate.
This modest growth projection for FY2025 comes on the heels of a slowdown in revenue collections in current FY2024 resulting in 4 consecutive months of below revenue collections from the benchmark expectation. Based on collections through the first 4 months, current revenue benchmark projections for the full FY2024 estimate a deficit of up to $880 million (MTF).
The lower than expected revenue collections in FY2024 in combination with the modest FY2025 forecast revenue growth may require Governor Healey and the Legislature to take action in the current year and upcoming fiscal year 2025 budgets, since state law requires a balanced budget.