Tax collections in February badly missed budget benchmarks, likely creating new budget headaches for Gov. Charlie Baker and the Democrat-controlled Legislature.

State Department of Revenue officials reported late Friday that February collections totaled $1.177 billion, which is $117 million or 9.1 percent below the benchmark. Eight months deep in the fiscal year, revenues of $15.855 billion are below benchmark by $134 million or nearly 1 percent.

Collections over the first eight months of fiscal 2017 are up by just $305 million, or 2 percent, at a time when lawmakers are weighing midyear spending requests from Baker, considering restoring funds to rescue services cut by Baker, and watching as MassHealth costs and enrollment grow, consuming tax dollars.

State tax collections from last month were down $96 million from February 2016, when the month’s haul totaled $1.273 billion.

Last year, Baker unilaterally reduced state spending by $98 million to balance the budget, and top Democrats at the time said that was a premature move. House Speaker Robert DeLeo said last month he wanted to see the February revenue numbers before moving ahead to restore spending in the areas cut by the governor.

The state is heading into some of the most important months for tax collections.

“While we maintain a cautious outlook, the remaining four months of the fiscal year have historically delivered nearly 40 percent of total annual revenues,” Revenue Commissioner Michael Heffernan said in a statement. “The March-through-June period includes both the bulk of the individual income tax filing season and important estimated payments. This period will determine how closely we trend to the full-year benchmark. We will be monitoring trends closely.”

Revenues were down for income taxes, motor vehicle sales, and corporate and business taxes, while the category of “other taxes” – which include gasoline, cigarette and estate taxes – was up $2 million or 1.1 percent above benchmark for the month.

Tax Collections Fall $134M Behind Benchmark

by State House News Service time to read: 1 min
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