Tax collections $94M below expected

WWLP TV

Updated: Feb 17, 2012 8:17 PM

BOSTON, Mass. (WWLP) — Administration and Finance Secretary Jay Gonzalez testified before the Joint Committee on Ways and Means Friday, warning that tax revenue collections are below what was projected for the current 2012 state budget by $94 million.

“We’re not at a place anymore where we can continue to do everything the way we’ve done it, where we continue to fund every program,” said Gonzalez.  “We need to be more strategic about how we continue to provide the service that we’re trying to provide in as cost effective way as possible.”

Lawmakers understood Gonzalez’s message; the state will have to rethink the way it spends, especially when many House lawmakers have pledged not to propose any new taxes or fees.

“Wherever we cut, it’s certainly going to have a more profound impact because these organizations and agencies are already at a bare bones minimum,” said Rep. Angelo Puppolo (D-Springfield), a member of Ways and Means.  “We’re hearing testimony now. You know it’s a little premature for me to suggest where we’re going to make cuts.”

The good news is Treasurer Steve Grossman reported a $22 million increase to the current budget’s Lottery revenue and a one-time $90 million revenue stream from the state’s unclaimed property division.  While the rainy day fund is higher than ever, Grossman recommended not drawing it down below one billion.

“That’s because I think it’s very important for us to maintain our bond rating, which is AA+, it’s the best it’s ever been,” said Grossman.  “We want to make sure that our rainy day fund stays at at least one billion dollars …to send that message to the investor community and the rating agencies that we mean to maintain our savings account.”

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