May 29, 2020
PUBLIC FINANCE > Budget > FY 2021

MTF: Slow climb from economic mess will take years

Matt Murphy, State House News Service ,


The hopes for a sharp and immediate rebound from the COVID-19 shutdown in Massachusetts are no longer realistic, according to the Massachusetts Taxpayers Foundation, which is now predicting a long and slow climb that will strain state resources. State revenues may not fully recover until 2025, MTF said.

The impacts of the economic downturn could be mitigated by tapping into the state’s $3.5 billion reserve fund or if Congress sent more relief funding to states like Massachusetts, but even with stimulus the group said past recessions have proven that the state could be in for a multi-year period of austerity.

“To state the implications straightforwardly: the Commonwealth will have limited budgetary flexibility for the next several years as tax revenues slowly rebound, particularly if the demand for safety net services resulting from an ailing economy and an aging population drive up expenditures,” MTF said in the report.