As state tax revenues continue to race past expectations, Gov. Charlie Baker expressed interest in replenishing the state’s “rainy day” savings account this year but stopped short of suggesting how lawmakers should alter their near-term budget plans.
The Department of Revenue announced Monday that it collected $3.061 billion in March, about 15 percent more than in March 2020 and nearly 27 percent more than the Baker administration anticipated bringing in over the course of the month.
Asked Monday if he believes the state should move away from plans to spend $1.6 billion from the stabilization fund in the fiscal 2022 budget, Baker said “we’ll see where we are” at the end of the current fiscal year.
“A lot of us worked really hard over the last few years to triple the size of the rainy day fund so that it would be there when it was raining,” Baker said. “One of the things we’ll definitely talk to the Legislature about, and we have talked a little bit with them about it at this point, is replenishing the rainy day fund because it’s really important that Massachusetts continue to have for the future a very robust rainy day fund. It really proved its mettle early on in the pandemic.”
The Baker administration has projected using $1.35 billion to $1.6 billion from the rainy day fund as part of its $45.6 billion fiscal year 2022 budget, following a net reduction of about $978 million in the current fiscal year. At the start of fiscal year 2021, the fund had a balance of about $3.5 billion.
Since Baker filed his spending proposal in January, President Joe Biden signed a stimulus package set to deliver almost $4.55 billion to state government in Massachusetts. If the next three months of state tax collections hit DOR’s benchmarks, the state will have collected $1.45 billion more in taxes than the administration projected for the year.
House plans for the rainy day fund could become clear when the House Ways and Means Committee releases its fiscal 2022 budget, perhaps next week.
