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Massachusetts Lawmakers Warn Of Possible Depression

Marie-Frances Rivera, president of MassBudget, said her think tank is estimating state tax collections could fall $5.0 billion to $5.7 billion in the current fiscal year, which ends June 30. The analysis is based on the two prior recessions, in which state tax collections were 16.1 percent and 13.8 percent below projections.

“These are large numbers. And while I stress again that we are not saying this pattern necessarily will occur again now, we are noting that such declines are by no means out of the question,” Rivera said in prepared testimony. “Such sharp and persistent declines in tax collections have occurred in each of the last two recessions and very well could again.”

Rivera also noted estimates that nearly 500,000 Massachusetts workers will be laid off or furloughed by July. That equates to a 14 percent drop in employment in just five months. By comparison, during the worst five-month stretch of the Great Recession, employment declined by 78,000, or 2.4 percent.

“This is not a drill. This is a stormy time,” Rivera said. “We are in an unprecedented moment – a public health crisis that has catapulted us into an economic crisis.”

https://patch.com/massachusetts/salem/ma-coronavirus-state-lawmakers-warn-possible-depression

Patch.com
Dave Copeland

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Most Experts See Year-Over-Year Tax Revenue Decline

The Massachusetts Budget and Policy Center decided not to prepare a revenue estimate number for this hearing, said its president, Marie-Frances Rivera, citing “all the uncertainty and variables.” In April, MassBudget said that if patterns from prior recessions hold and there is some limited growth, fiscal 2021 collections could land between $5 billion and $5.7 billion shy of the estimates budget writers agreed to in January.

“We think that there’s a budgetary crisis that’s happening and we all have to be just fully aware and eyes-open about that,” Rivera said Wednesday. “There’s danger because all of the public goods that we’re relying on to guide us through this public health economic crisis, whether it’s health care, whether it’s housing people, whether it’s educating our young people, a lot of these are in jeopardy and the needs are growing.”

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