diminishing revenues

AP's headline was a bit of a cheap shot, but Friday was still a bad news day for the Governor announcing the likelhood of even more cuts. .

BOSTON—Gov. Deval Patrick summoned reporters to his office Friday to deliver sobering news: Tax collections were far below projections during September and short by nearly as much for the first quarter of the state's fiscal year......

Patrick denied any effort to minimize the impact of bad news. In the case of the tax shortfall, he explained that his Cabinet routinely meets on Fridays, and this week's was the first such meeting since the fiscal quarter ended.

"We wanted to have a chance to talk about those numbers with the Cabinet before we made the announcement, and so we're telling you -- as I told you I would -- just as soon as I had them," the governor explained.

Jim O'Sullivan from the State House News had the facts on the short fall..

Regular sales tax revenues climbed $32 million, the Department of Revenue said, but fell $28 million short of projections. Retail industry business collections climbed $24 million, 24 percent, driven by an increase of up to $9 million from alcohol, which had previously been exempt from that tax.

Business-to-business sales were flat, despite the tax increase. While the federal “Cash-for-Clunkers” program drove motor vehicle sales taxes in July and August, that trend fell off with the program’s end, bringing collections in $5 million below estimates for September.

Corporate and business taxes plummeted 29.6 percent, to $144 million below benchmark, which Department of Revenue officials attributed “at least in part to the impact of the declining economy on corporate profits, use of transferable tax credits, and faster processing of refunds this September.”

Officials defended the sales tax hike, saying the revenue picture would be worse without the increase. Sales tax collections climbed 13.8 percent from a year ago, but still fell $37 million below the monthly benchmark. The increase took effect Aug. 1, with post-tax hike collections reflected in the September numbers.

“Clearly, the rate increase in sales tax has mitigated the effects on the sales tax revenues from the underlying economy and the fact that people are not spending as much,” said outgoing Patrick budget chief Leslie Kirwan. “So it would be a worse situation without the tax that was ultimately included in the budget.”

the House's bad news bear W&M Chair Charlie Muphy was quoted..

Murphy said September’s tax collections will likely prompt a more assertive effort from the Patrick administration to obtain expanded budget-cutting authority from the Legislature. Patrick has already requested the power to cut spending beyond executive branch agencies, but has been ignored so far by lawmakers uneasy with ceding that power.

“He’s asked, but from what I can tell it’s been asked but it really hasn’t been pushed a great deal. And I suspect that push will be made much more aggressively,” Murphy told the News Service.

As president of the state Senate, Therese Murray of Plymouth has an unusually advantageous view of the issues affecting the suburbs south of Boston. She also understands the political realities that will shape just what, if anything, happens on those issues in the coming year. Murray also talked about the challenges posed by a casino in the region, her concerns about safety at the Plymouth nuclear power plant, the problem of towns' diminishing revenues in a sluggish economy, the need for more affordable housing - and the benefits of a Hollywood studio opening in her hometown.

Here's one very smart lady with an informed opinion about everything from nuclear power plants to the economic impact of a local Hollywoood Studio -- it's her home town after all. What do you think?