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.”