Fiscal ’06 revenues 8.2 percent above last year’s
by Statehouse News ServiceJULY 17, 2006 -- The state collected a record $18.487 billion in the fiscal year that ended June 30, 8.2 percent above last year and over $1 billion more than the revenue estimate used in the budget, according to preliminary figures released Monday.
Receipts for Fiscal Year 2006 outpaced the final revision of the state’s full-year revenue projection by $329 million, the Department of Revenue said.
June’s $2.036 billion intake set a record for that month, fully 11.2 percent above last year and $132 million beyond the monthly benchmark.
Despite the impressive numbers, the state’s final FY ’06 surplus will be markedly smaller because of still-uncalculated spending totals for the year.
In a press statement, Revenue Commissioner Alan LeBovidge said investment-associated income taxes and corporate taxes helped fuel “a good year for revenue,” while sales and use tax collections lagged. LeBovidge also credited “more effective collection methods.”
Last year, LeBovidge labeled FY ’05 “a very good year for revenue.”
The numbers arrive as the Legislature prepares to undertake this week a veto-override spree, with formal sessions planned in both chambers Wednesday and Thursday. Gov. Mitt Romney has railed against the Legislature’s plan to draw from the state’s “rainy day fund.” While the administration puts the reserve drawdown called for in two FY ’06 spending plans at $250 million, legislators say it’s closer to $120 million. Their budget for FY ’07 pulls $550 million from the stabilization account.
House Ways and Means chair Robert DeLeo said the surplus numbers lend momentum to the House plan for compensating the stabilization fund subtractions by depositing the FY ’06 collections.
“The governor’s call that we’re diminishing the rainy day fund, I think, will not hold as much water, because I think it will probably be our intention, or something we’re taking a look at anyways, is to take a look at the surplus funds and put them back into rainy day fund,” DeLeo said.
At $1.399 billion better than last year’s collections, FY ’06 reflected the state’s continuing rebound from its fiscal crisis earlier in the decade, when the economy gave way in FY ’02. Last fiscal year was up $1.1 billion over the one before.
Romney, a Republican, has blasted the Democrat-controlled Legislature for passing a budget he calls irresponsible in its use of savings, and for tacking on capital supplemental and economic stimulus bills he said contained “pure pork.”
He vetoed $225 million from those bills and $573 million from the $25.25 billion FY ’07 budget, but legislators have been and plan to continue overriding the governor’s vetoes.
Meanwhile, the state is facing untold and unforeseen costs brought on by last Monday’s fatal I-90 Connector tunnel failure. As engineers probe the tunnels for more problems and prepare solutions, the state is anticipating losses in overtime payouts, liability, and recovery efforts.
Romney Communications Director Eric Ferhnstrom said, “I think the emergency we’re going through now … is a reminder that the rainy day fund is for this type of contingency situation. It’s not for building merry-go-rounds in Holyoke or gazebos in Braintree.”
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