By Bob Katzen
The House 157-0 approved, and Senate approved on a voice vote without a roll call approved a bill that would authorize the state treasurer to borrow billions of dollars needed to keep the state running through June because of diminishing tax revenues during COVID-19. State tax collections dropped in April by more than $2.3 billion compared to April 2019. The loss is attributed to the reduced income tax revenue since the Bay State moved the tax return filing deadline from April 15 to July 15 and to the loss of sales tax and other revenue as a result of business shutdowns.
The bill still needs final approval in both branches prior to it going to the governor for his signature.
Supporters said they anticipate the borrowing could reach $3 billion in order to keep the state financially afloat. They said the state is obligated to pay its bills and has no other choice.
Senate Ways and Means chair Sen. Mike Rodrigues (D-Westport) said the Baker administration and the Legislature joined together in a bipartisan manner to move the tax filing date and agreed on a way to pay the state’s bills despite what will be a sharp temporary dip in the state’s revenues from April 15 to July 15.
“The Legislature and the administration agreed to engage in what is called … RANs — Revenue Anticipation Notes,” said Rodrigues. “Meaning that we are going to borrow in fiscal 2020 in anticipation of revenue coming in in fiscal year 2021 the amount of money that was deferred or estimated to have been deferred by the movement of the tax filing date.”