May 29, 2020
PUBLIC FINANCE > Budget > FY 2021

With state revenues crumbling, Massachusetts took out a $1.75 billion credit line

Matt Stout ,

The Boston Globe

According to one watchdog, the state budget won’t weather it well. The Massachusetts Taxpayers Foundation projected in a report released Thursday that it could take five years for state revenues to exceed prepandemic levels.

Even that scenario comes with a caveat. For revenues to surpass prepandemic expectations by fiscal year 2025, tax receipts would need to grow at 6 percent annually, starting in fiscal year 2022 — a rate that would surpass average annual growth from the past decade.

At that pace, revenues would have still eroded by more than $11.9 billion in a five-year span. And should tax revenues fail to grow at those levels, it would take even longer to once again reach the $30.3 billion in tax receipts state officials had projected to collect this year.

“Despite the initial hopeful claims of MTF and others that both the economy and everyday life will recover on a faster track, current data, as well as recent history, suggest otherwise,” the report states, noting it took three years for revenues to recover after the recessions of 2002 and 2009.