May tax revenue 'helps soften' April’s tumble, Mass. budget chief says

Above-expected tax collections in May took some of the sting out of the prior month's revenue plummet, and the Healey administration's budget chief said Tuesday he thinks Massachusetts remains on solid financial footing.

Administration and Finance Secretary Matthew Gorzkowicz called the $2.7 billion tax haul in May "good news," pointing out that collections were about $236 million or 9.5% up from May 2022 and about $169 million or 6.7% above the most recent benchmark for the month.

"That $169 [million] really helps soften a little bit of the April numbers," Gorzkowicz told the Local Government Advisory Commission, referring to the more than $2 billion plunge from April 2022 collections.

Gorzkowicz said May revenues increased in "most major tax types" compared to the prior year, including withholding, sales and use taxes that are typically indicators of the state's overall economic outlook.

Still, the better performance in May did not fully offset the precipitous decline Massachusetts observed in April. With one month remaining in fiscal year 2023, year-to-date tax revenues are about $1 billion less than budget-writers anticipated, or roughly $600 million less when accounting for the impact of a pass-through entity excise.

"A little bit of catching up to do," Gorzkowicz told the commission. "June is the second-largest month [for collections], so we're following June revenues closely and we'll be back to you next month with an update on June revenues and an outlook on how we'll potentially close out fiscal year '23."

He added, "We remain confident in our ability to manage the fiscal year '23 budget."