Connect with us

Massachusetts

3 things you should know about Massachusetts’ near $600M tax shortfall

Published

1 year ago

on

3 things you should know about Massachusetts’ near 0M tax shortfall


Tax revenues for fiscal 2023 in Massachusetts fell short by nearly $600 million compared to original projections. The tax shortfall now puts the commonwealth’s savings account at risk for a reduction and may place the state with a budget deficit.

The state collected $39.164 billion in taxes during fiscal 2023, but that’s $2 billion less than the previous year.

Tax collections were $454 million below the original budget projections, and $605 million below the updated projection made shortly after Gov. Maura Healey took office, the Boston Globe reported.

The majority of the tax shortfall – which was nearly $593 million of the $605 million – can be attributed to lower-than-expected capital gain taxes, according to the State House News Service.

Advertisement

Massachusetts can only allocate a certain amount of money from capital gains taxes toward direct spending, the news service said. Any other excess amount must be placed into the state’s savings account.

The Healey administration estimates the state is nearly $39 million short, the Boston Globe reported.

But the budget gap could be increased to $177 million. The state estimates that it reaped about $240 million from the “millionaires tax” $103 million of which came from capital gain taxes.

Although the capital gain revenue from the “millionaires tax” doesn’t affect the budget’s bottom line, the remaining $138 million is still in the commonwealth’s general fund.

If lawmakers choose to keep the $138 million in the state’s general fund, the tax shortfall would remain at $39 million, the news service reported. However, if they choose to put the funds into the fiscal 2023 surtax revenue into the same account where all future surtax revenue will go, the budget gap would increase to $177 million.

Advertisement

House and Senate Democrats who negotiated the compromise $56 billion budget in August didn’t change their assumption of a $40.4 billion in tax revenue for fiscal 2024, State House News Service reported.

“The reality is you’re talking about revenues that came in within less than a point and a half of where we thought they were going to come in. $600 million one way or the other, to me — that doesn’t give you enough information to make a major change on a $40 billion projection,” Doug Howgate, the president of the Massachusetts Taxpayers Foundation told State House News Service.

Both the Healey administration and Howgate said they were optimistic about the state’s budget and spending for the current fiscal year.

The budget shortfall will lower deposits into Massachusetts’ emergency savings account, a retirement trust fund and pension liability fund, the Boston Globe reported.

But, the commonwealth will place $750 million into the emergency savings account, which will increase its balance to nearly $8 billion, the news agency reported. Massachusetts will also allocate $41.7 million to a trust fund for state retiree benefits and $41.7 million into its pension liability fund.

Advertisement

Tax collections fell sharply in April. And even though the performance was better in May and June, it was not enough to recover fully from the gap that emerged, the SHNS said.

“Despite a disappointing month for tax collections in April, tax revenue in May and June exceeded revised benchmarks and helped to shrink the gap,” said Matthew Gorzkowicz, the Administration and Finance Secretary.

Gorzkowicz further said that the state is on track to close the fiscal 2023 in balance without dipping into the emergency savings account.



Source link

Advertisement
Related Topics:
Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Massachusetts

Local startups recovering from the burst tech funding bubble – The Boston Globe

Published

8 hours ago

on

January 15, 2025

By

Local startups recovering from the burst tech funding bubble – The Boston Globe


Tech startups based in Massachusetts finished 2024 with a buzz of activity in venture capital fundraising.

In the fourth quarter, 191 startups raised a total of $4.1 billion, 20 percent more than startups raised in the same period a year earlier, according to a report from research firm Pitchbook and the National Venture Capital Association. For the full year, local startups raised $15.7 billion, about the same as in 2023.

The stability ended two years of sharp declines from the peak of startup fundraising in 2021. Slowing e-commerce sales, volatility in tech stock prices, and higher interest rates combined to slam the brakes on startup VC activity over the past three years. The 2024 total is less half the $34.7 billion Massachusetts startups raised in 2021.

Advertisement

But local startup investors have expressed optimism that VC backing will continue to pick up in 2025.

The fourth quarter’s activity was led by battery maker Form Energy’s $455 million deal and biotech obesity drugmaker Kailera Therapeutics’ $400 million deal, both in October, and MIT spinoff Liquid AI’s $250 million deal last month. Two more biotech VC deals in October rounded out the top five. Seaport Therapeutics, working on new antidepressants, raised $226 million and Alpha-9 Oncology, developing new treatments for cancer patients, raised $175 million.

Massachusetts ranked third in the country in VC activity in the quarter. Startups based in California raised $49.9 billion and New York-based companies raised $5.3 billion.

Advertisement

Venture capital firms, however, had an even harder time raising money in 2024 compared to earlier years. Massachusetts firms raised $5.9 billion, down 7 percent from 2023 and the lowest total since 2018. That mirrored the national trend, as VC firms across the country raised $76.1 billion, down 22 percent from 2023 and the lowest since 2019.

Only one Massachusetts-based VC firm raised more than $1 billion in 2024, a more common occurrence in prior years, according to the report: Flagship Pioneering in Cambridge raised $2.6 billion in July for its eighth investment fund plus another $1 billion for smaller funds. The firm, founded by biotech entrepreneur Noubar Afeyan, helps develop scientific research for startups in addition to providing funding.

The next largest deals were Cambridge-based Atlas Ventures’ $450 million biotech-focused fund announced last month and Engine Ventures $400 million fund investing in climate tech startups announced in June.

The decline comes as VC firms have had trouble getting a return on their investments, because so few startups have been able to go public. Just six biotech companies based in Massachusetts and no tech companies went public last year.

Advertisement

Aaron Pressman can be reached at aaron.pressman@globe.com. Follow him @ampressman.





Source link

Continue Reading

Massachusetts

Mass. gives noncompliant towns more time to meet MBTA zoning regulations

Published

16 hours ago

on

January 15, 2025

By

Mass. gives noncompliant towns more time to meet MBTA zoning regulations


The Healey administration filed emergency regulations late Tuesday afternoon to implement the controversial law meant to spur greater housing production, after Massachusetts’ highest court struck down the last pass at drafting those rules.

The Supreme Judicial Court upheld the MBTA Communities Act as a constitutional law last week, but said it was “ineffective” until the governor’s Executive Office of Housing and Livable Communities promulgated new guidelines. The court said EOHLC did not follow state law when creating the regulations the first time around, rendering them “presently unenforceable.”

The emergency regulations filed Tuesday are in effect for 90 days. Over the next three months, EOHLC intends to adopt permanent guidelines following a public comment period, before the expiration of the temporary procedures, a release from the office said.

“The emergency regulations do not substantively change the law’s zoning requirements and do not affect any determinations of compliance that have been already issued by EOHLC. The regulations do provide additional time for MBTA communities that failed to meet prior deadlines to come into compliance with the law,” the press release said.

Advertisement

Massachusetts’ Supreme Judicial Court ruled that the state’s attorney general has the power to enforce the MBTA Communities Law, which requires communities near MBTA services to zone for more multifamily housing, but it also ruled that existing guidelines aren’t enforceable.

Follow NBC10 Boston:
https://instagram.com/nbc10boston
https://tiktok.com/@nbc10boston
https://facebook.com/NBC10Boston

https://bsky.app/profile/nbcboston.com

The MBTA Communities Act requires 177 municipalities that host or are adjacent to MBTA service to zone for multifamily housing by right in at least one district.

Cities and towns are classified in one of four categories, and there were different compliance deadlines in the original regulations promulgated by EOHLC: host to rapid transit service (deadline of Dec. 31, 2023), host to commuter rail service (deadline of Dec. 31, 2024), adjacent community (deadline of Dec. 31, 2024) and adjacent small town (deadline of Dec. 31, 2025).

Under the emergency regulations, communities that did not meet prior deadlines must submit a new action plan to the state with a plan to comply with the law by 11:59 p.m. on Feb. 13, 2025. These communities will then have until July 14, 2025, to submit a district compliance application to the state.

Advertisement

Communities designated as adjacent small towns still face the Dec. 31, 2025 deadline to adopt compliant zoning.

The town of Needham voted Tuesday on a special referendum over whether to re-zone the town for 3,000 more units of housing under Massachusetts’ MBTA Communities law.

Follow NBC10 Boston:
https://instagram.com/nbc10boston
https://tiktok.com/@nbc10boston
https://facebook.com/NBC10Boston

https://bsky.app/profile/nbcboston.com

Like the old version of the guidelines, the new emergency regulations gives EOHLC the right to determine whether a city or town’s zoning provisions to allow for multi-family housing as of right are consistent with certain affordability requirements, and to determine what is a “reasonable size” for the multi-family zoning district.

The filing of emergency regulations comes six days after the SJC decision — though later than the governor’s office originally projected. Healey originally said her team would move to craft new regulations by the end of last week to plug the gap opened up by the ruling.

Advertisement

“These regulations will allow us to continue moving forward with implementation of the MBTA Communities Law, which will increase housing production and lower costs across the state,” Healey said in a statement Tuesday. “These regulations allow communities more time to come into compliance with the law, and we are committed to working with them to advance zoning plans that fit their unique needs.”

A total of 116 communities out of the 177 subject to the law have already adopted multi-family zoning districts to comply with the MBTA Communities Act, according to EOHLC.





Source link

Advertisement
Continue Reading

Massachusetts

Revere city councilor slams Massachusetts officials for being ‘woke’ after migrant shelter bust

Published

1 day ago

on

January 14, 2025

By

Revere city councilor slams Massachusetts officials for being ‘woke’ after migrant shelter bust


A Revere city councilor says the state’s right-to-shelter law is a “perfect example” of how “woke” ideologies are harmful, as he addressed the arrest of a migrant who allegedly had an AR-15 and 10 pounds of fentanyl at a local hotel.

Originally Published:



Source link

Continue Reading

Trending