January 16, 2007
Revenue growth to speed up in Fiscal Year 2008
Jan. 16, 2007) Testifying before the annual consensus revenue
forecast hearing conducted by the Joint Committee on Ways and Means,
The Beacon Hill Institute at Suffolk University (BHI) reported today
that it expected tax revenue growth to speed up in Fiscal Year 2008,
after falling off in FY 2007.
forecasts for FY 2007 and 2008 are:
For FY 2007 (ending June 30, 2007): $19.040 billion, for growth of 3.0%
over FY 2006.
· For FY 2008 (ending June 30, 2008): $20.265 billion, for growth
of 6.4% over the predicted level for FY 2007.
grew at a torrid pace of 8.1% in FY 2006. FY 2007 growth will be substantially
lower in part because growth in FY 2006 was so high and in part because
of tax law changes that took effect in FY 2007. With the continuing
improvement in the state economy, growth will recover in FY 2008.
the fourth year that BHI, at the invitation of legislators responsible
for writing the upcoming budget, has provided a forecast. BHIs
optimism on FY 2008 revenues is bolstered by the following observations:
The average annual growth of tax revenues for the past quarter century
(FY 1981 to FY 2006) has been about 6.4%. BHIs projected growth
for FY 2008 is consistent with that record.
Except for recessions, state tax revenues have never increased by less
than 5% for two consecutive years over the same period.
The combination of rising demand for the states technology products
and financial services and the reversal of the states population
and employment losses will strengthen revenue growth in FY 2008.
growing pessimism over the states revenue outlook, we see strong
continued growth in Fiscal Year 2008," said David G. Tuerck, executive
director of the institute. "We base our confidence in high tech,
financial services and other key sectors, as well as our analysis of
revenue trends going back many years."
revenue forecasts for 11 state taxes are available upon request by calling
BHI at 617-573-8750.
press release in PDF format
on 1/16/07 4:17 PM