MA Braces For Lost Taxes In Coronavirus Shutdown

BOSTON — Massachusetts tax collections were $2.66 billion in March, just $8 million, or 0.3 percent, lower than they were in March 2019.

That's the good news, considering nonessential businesses were ordered closed March 24, cutting off millions in sales and payroll taxes. The bad news is state officials are expecting huge losses in April and possibly longer at a time when the state is facing record-breaking unemployment claims and other expenses related to the new coronavirus emergency.

"Future revenue collections are likely to be impacted by the COVID-19 disruptions, including the regular sales, meals, and room taxes deferrals the Commonwealth has adopted, as well as the extension of the personal income tax filing and payment deadline," Revenue Commissioner Geoffrey Snyder said. "We will monitor the economic conditions and the impact of COVID-19 and tax deferrals on tax collections very closely for the rest of the fiscal year 2020 and into the next fiscal year."

Snyder was appointed to his position March 24, the same day the state ordered all nonessential businesses closed. March revenue figures were 3.2 percent above state projections, but key areas, including sales and income taxes, fell short of benchmarks.

Last month, state lawmakers scrapped a budget-writing process that had begun in December, as it became clear that the state and nation were facing a prolonged economic slowdown because of the coronavirus pandemic. Those budget writers not only need to write a new budget for the fiscal year beginning July 1, but also must find ways to plug revenue gaps in the current fiscal year.

Last week, the Massachusetts Taxpayers Foundation warned that the state will likely fall $300 million to $500 million short of revenue projections for the current fiscal year, while the Center for State Policy Analysis said it could be as high as $750 million. Both groups warned revenue shortfalls could be as high as $2 billion for the fiscal year beginning July 1.

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Addressing those shortfalls will begin Tuesday, when lawmakers are scheduled to convene a "virtual round table" to discuss the coronavirus's impact on the state.

"In the midst of the continued fallout from the COVID-19 pandemic, the fiscal situation the Commonwealth is facing is both dire and unprecedented," House Ways and Means Chair Aaron Michlewitz said in a statement. "It is crucial that we have as clear of a picture as possible before we make any substantial budgetary decisions."

Michlewitz said it is "highly unlikely" the House will release its budget in April, as it typically does.

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Dave Copeland can be reached at dave.copeland@patch.com or by calling 617-433-7851. Follow him on Twitter (@CopeWrites) and Facebook (/copewrites).