State facing tax revenue shortfall of nearly $1 billion
State tax revenues came in well below expectations for the third straight month, leaving Massachusetts lawmakers with a major budget shortfall for the fiscal year that begins July 1, The Boston Globe reports.
Tax revenue for the coming fiscal year is $650 and $950 million less than expected, Gov. Charlie Baker said on Monday. Like in April and in May, tax revenues in June fell below the anticipated level. The downgrade is partly due to stock market volatility lowering the state’s capital gains tax revenues, Baker said.
In addition, Great Britain’s decision to leave the European Union, or “Brexit,” has caused further market turmoil.
“We’re making some assumptions for next year that are based on best guesses at this point in time with the notion that Brexit falls into the category of an unknown,” Baker told the Globe.
Because the state must have a balanced budget, cuts to spending and increases in revenue are expected. Despite the budget shortfall, Massachusetts’s economy shows signs of health, including low unemployment and stable sales tax revenue.
You can read the full story at The Boston Globe.
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