With the month of January coming to a close, the Commonwealth of Massachusetts received a mixed bag of news as legislators poured over projected revenue surpluses and the instability of state, national, and world economies.
Economic experts forecast an increase in state tax revenues around 4.5 percent for the 2016 fiscal year, slightly up from the previous year’s growth of 4 percent.
Despite this good news, Massachusetts House incumbent budget chief, Rep. Brian Dempsey, cautioned that the revenue gains might not be as good as the numbers suggest.
Instability in foreign oil markets, continued turmoil in the Middle East, and a slowing European economy have led to tender markets across the board. Low oil prices have helped spur an increase in American consumer spending.
Similar economic recovery occurred during the 1990s when the state began recovering from the effects of the previous decade’s high oil prices that slammed the brakes on economic growth. However, during the dwindling years of the twentieth century, Massachusetts was able to surpass 6 percent growth in tax revenues while implementing tax cuts, increasing spending on education, and increasing the amount the state had in its treasury.
State representatives still have a looming $765 million dollar deficit to handle as 2015 begins its crawl toward the warmer months and the end of the fiscal year. Discrepancy between revenue estimates have also forced legislators to discuss which budgetary actions would best serve Massachusetts heading into the 2016 fiscal year.
Even with uncertainty regarding the actions needed to keep the state’s tax revenues climbing, there is good news for the state’s residents. The amount of people unemployed or underemployed has dropped 5 percent since reaching 16 percent in 2009 during the recession. Meanwhile, the unemployment rate is sitting at 5.5 percent, with hopes it will drop even lower as the year unfolds.