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State awash in cash as tax revenue pours in
State awash in cash as tax revenue pours in

BOSTON – Through mid-June, the Department of Revenue collected nearly 80 percent of the tax revenue it anticipates bringing in during this final month of a remarkable fiscal year that has already exceeded all expectations and appears likely to produce a significant surplus.

In its mid-month report to the Legislature, DOR said it had collected $2.003 billion from taxpayers between June 1 and June 15, up $768 million or 62.2 percent compared to the same period in June 2020.

DOR’s latest monthly benchmark for June projected a monthly total of $2.578 billion.

“The month-to-date increase is mostly due to increases in withholding, income estimated payments, corporate and business taxes, sales and use tax, and estate tax,” Revenue Commissioner Geoffrey Snyder wrote.

Snyder said collections are generally weighted towards the end of the month and urged caution when interpreting mid-month results. With the second half of June remaining to be counted, DOR has collected $32.454 billion so far in fiscal year 2021, which ends June 30.

That’s $3.364 billion more than the Baker administration’s most recent estimate for the full 12-month fiscal year and $1.3 billion more than the pre-pandemic estimate of $31.15 billion in tax revenue for fiscal year 2021.

It is also $2.334 billion more than the consensus revenue agreement of $30.12 billion the governor, House and Senate used to craft their fiscal year 2022 budget proposals.

The six lawmakers currently negotiating a compromise fiscal year 2022 budget could wield considerable power by increasing the revenue assumption to give themselves additional money to spend, save or turn back in the form of tax relief.

The fiscal year 2021 tax collections, which have obliterated the Baker administration’s expectations for the last several months, look to be headed towards a significant surplus.

That would present another pot of mostly untethered money for the governor and Legislature to manage while also deciding how to spend more than $5 billion in federal aid received as part of the American Rescue Plan Act.

Gov. Charlie Baker is scheduled to make an announcement related to the fiscal year 2021 budget Wednesday at 1 p.m. from the State House.

This is a developing story.