BOSTON – Rhode Island has company in seeing red ink three months into the new fiscal year.
Experts told Massachusetts lawmakers Thursday that the Bay State may face a $900 million shortfall in its $27 billion budget by the time the fiscal year closes June 30.
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The state collected $212 million, or 4.7 percent, less in tax revenue during the first quarter than lawmakers had expected when they crafted the budget last spring, the Mass. Department of Revenue said last week. Rhode Island’s first-quarter tax collections also came in 4.7 percent behind projections.
Mass. Gov. Deval L. Patrick said his administration has begun putting together a list of spending cuts to deal with the fall in revenue.
Michael Widmer, president of the Massachusetts Taxpayers Foundation, testified on Beacon Hill that the state is likely to face a combined shortfall of $900 million because of falling revenue and rising Medicaid costs, Reuters reported.
Lawmakers resisted the idea of raising taxes, meaning if additional cuts are made they are likely to come from aid to cities and towns, Boston-based State House News Service reported.
Nor is there much hope the bad news for Massachusetts’ treasury will end soon.
The Massachusetts Budget and Policy Center said in a separate report Thursday that it is projecting a $2.25 billion budget shortfall for the next fiscal year, which starts July 1, 2010. That is after including an expected infusion of up to $812 million in federal stimulus dollars.
Widmer largely agreed, estimating the gap for the next fiscal year could total between $2 billion and $3 billion.
