Massachusetts revenue officials told lawmakers today to expect modest economic growth next year, while warning there are a lot of uncertainties. The state will use the forecasts to determine how much revenue to count on for the next budget.
State tax collections are running about $300 million dollars above expectations and next fiscal year, economists say revenues will grow by up to 1.2 billion dollars or more than 5 percent.
State Representative Brian Dempsey of Haverhill, the chief budget writer in the house, said news of a budget agreement in Washington means Congress may avoid a second sequester, which would be good for the Massachusetts economy.
“There could be an elimination of $63 billion in cuts, 50 percent in domestic and 50 percent military spending, as well from the domestic side, health research, education, head start.”
State Revenue Commissioner Amy Pitter said there are still risks to the economic forecasts.
“The federal fiscal policy challenges and the faltering recovery from Eurozone’s recession still remain the major sources of uncertainty for economic growth and tax revenues in the near future.”
The group Massachusetts Taxpayers Foundation says most of the projected growth would be eaten up by mandatory costs such as Medicaid and pensions.
