Declining tax revenues will likely cost our state about $500-$750 million during the current fiscal year, which ends on June 30. Over the next five quarters, the loss may reach $3 billion. I believe the total budget for the state is $43 billion, so that would be a 7% reduction–at a time of intense need.
The scale of this problem may not surprise anyone, but it’s important to be able to quantify it as a basis for smart policy. These estimates come from a new brief entitled “Estimating the Shortfall in Massachusetts Tax Revenues,” from the new Center for State Policy Analysis (cSPA) at Tufts University’s Jonathan M. Tisch College of Civic Life, where I work.