Massachusetts tax collections for March surpassed expectations even as the total haul for fiscal year 2024 remained behind already lowered benchmarks, according to figures released Wednesday morning.
The same day that Gov. Maura Healey instituted a wide-ranging pause on new hires within the executive branch agencies under her control, the Department of Revenue reported Massachusetts collected just over $4 billion from residents, or 3.3% above projections.
At an event on Cape Cod, Healey said the revenue report was “more positive than we had expected.”
“That said, we still have an obligation to manage within budget, so we think that this hiring controls initiative here, which will run through the end of the fiscal year, is something that is necessary. It is important to do,” she told reporters.
Amid months of sagging revenues, Healey’s budget office lowered the benchmark for fiscal year 2024 by $1 billion and unilaterally cut $375 million from the state budget, a move that sparked some criticism from groups who saw their budgets impacted.
Beacon Hill budget writers have seen an unflattering financial picture emerge over the last eight months as revenues consistently came in below projections. That has placed a stressor on officials as they craft the fiscal year 2025 spending plan and manage large tabs for social programs like the emergency shelter system.
But the March numbers injected some positivity into the conversation at the State House even though all eyes quickly turned to April, the largest tax collection month in the year and one that can make or break the budget. Collections for this month are expected to be reported at the start of May.
The Department of Revenue reported year-to-date collections for fiscal year 2024 total just over $25 billion, which is $4 million less than the same time last year and $145 million below year-to-date benchmarks.
March collections increased in income tax withholding compared to March 2023 but were partially offset by decreases in non-withheld income tax, sales and use tax, and “all other” taxes, said Department of Revenue Commissioner Geoffrey Snyder.
“The decrease in non-withheld income tax was driven by an unfavorable increase in income tax refunds and a decrease in income tax returns and bills. The decrease in sales tax was mainly due to typical timing factors in collections. The decrease in ‘all other’ tax is mostly attributable to a decrease in estate tax, a category that tends to fluctuate,” Synder said.
