April Most Critical Month For State Finances
The tax collectors at the Department of Revenue raked in $1.713 billion during the first half of April, the most critical month for state finances. But while that represents a slight increase compared to the same period last April, DOR warned that comparisons “are not meaningful” for a variety of factors.
April is the most significant month for state tax collections and its importance is magnified this year as soft fiscal 2024 collections lagged behind expectations by $145 million through March, adding a layer of difficulty to nearly every decision made on Beacon Hill. The Healey administration has set the full-month benchmark at $5.291 billion, and what was collected by April 15 represented roughly one-third of the full month expectation.
DOR says every month that its mid-month reports should not be used to assess trends or project full-month revenues, but this month the department said the timing of Wednesday’s tax-filing deadline gave its warnings greater weight.
“Daily income tax collections typically fluctuate significantly on and around the income tax filing deadline, which was April 17 this year. This report reflects revenue collections through April 15 and, because of the significant fluctuations in daily collections, comparisons to the same period in April 2023 are not meaningful,” DOR said in its mid-month letter to lawmakers. “In addition, because the income tax filing deadline for Massachusetts residents was April 17, and the receipt and processing of returns continues through May, the reported revenue figures do not represent the full impact of the 2023 tax season.”
Comparisons to April 2023 might not be helpful anyways. Last April, tax revenue came up $1.435 billion short of what was expected and turned what was shaping up as a surplus into a deficit. This April, the Healey administration is projecting that it will take in $506 million more than what was collected last April and more than double what was hauled in during February.
“April is usually one of the strongest months. So, the hope is we will start to rebound in April. But there’s no guarantee … we’re at the mercy of the economy right now,” House Speaker Ron Mariano said on WCVB last weekend when asked about the revenue bounceback in March. “We had eight, nine months of less-than-predicted revenues. And we’ve had a half a month of uptick. It’s not enough to hang your hat on.”
April’s full-month revenue report will be due from DOR by Friday, May 3.
