May 27, 2020
PUBLIC FINANCE > Budget > FY 2021

Budget watchdogs warn economic impact of coronavirus will crush Massachusetts budgets for years

Erin Tiernan ,

Boston Herald

Budget watchdogs dashed hopes for a quick recovery from the economic havoc wrought — seemingly overnight — by the coronavirus pandemic, warning the devastation of plummeting tax revenues and widespread unemployment could leave a red mark on state and local budgets for years to come and spur tough choices ahead for policymakers.

“Despite the initial hopeful claims of (Massachusetts Taxpayers Foundation) and others that both the economy and everyday life will recover on a faster track, current data, as well as recent history, suggest otherwise,” warned the grim report released Thursday by the Massachusetts Taxpayers Foundation.

The report comes about a week after the foundation downgraded its revenue forecast for the coming fiscal year to a projected loss of $6 billion in tax revenues — far more than its initial estimate of $4.4 billion.

It’s a gut punch the foundation estimates will take the state’s economy until at least 2025 to recover from, and that’s assuming tax revenues grow at a rate of 6% — more than they have in the past decade.