Massachusetts collected $2.6 billion in tax revenues in July, a haul that was roughly on par with what the state brought in during the same time last year, according to a Department of Revenue report released Monday.
The revenue report for the first month of fiscal year 2025 was made public only days after a top budget writer in the state Senate warned collections for July were expected to be “very bad.”
July revenues came in about $18 million less, or 0.7% below, what the state collected in July 2023, according to the Department of Revenue. The decreases were seen in withholding, non-withheld income tax, and the “all other” tax category, Department of Revenue Commissioner Geoffrey Snyder said.
“These decreases were partially offset by increases in sales and use tax, and corporate and business tax. The decrease in withholding reflects current labor market conditions as well as periodic fluctuations. The decrease in ‘all other’ tax is due, in part, to estate tax, a category that tends to fluctuate,” Snyder said in a statement.
Gov. Maura Healey’s administration has not yet released its revenue benchmark for the fiscal year so the July haul cannot be measured against officials’ expectations.
July is one of the smaller tax collections of the month because quarterly payments are not due for most people and businesses, according to the Department of Revenue. Only about 7% of annual revenue has historically come in during July, the department said.
Massachusetts Taxpayers Foundation President Doug Howgate cautioned against using the July revenue report as a predictor for the rest of the fiscal year.
“I think it’s important to know July and August really are small months,” he told the Herald. “That’s not to say you don’t want to track these numbers closely, and you always want to collect more in one month than you did the year before in the same month, but I think that I wouldn’t read too much into this and we’ll know more once we start to get towards the end of the first quarter.”
During a marathon end to formal lawmaking last week, Senate budget writer Michael Rodrigues said revenues for July were expected to be “very bad,” which he used as a reason for not voting to restore any of the $317 million Healey vetoed from the fiscal year 2025 budget.
A spokesperson for Rodrigues did not immediately respond to a Herald inquiry sent Monday afternoon.
In a letter outlining her budget vetoes, Healey also warned of “uncertainty” in the economy at the start of fiscal year 2025.
“Interest rates reductions anticipated at the start of the year have not materialized and tax collections for FY24 underperformed in some categories compared to our original expectations,” she wrote. “Also, as is usually the case, there will be some deficiencies which will require active management. It is our responsibility to be good stewards of our resources and live within our means.”