11/10/2008
FY 09 state budget
The state's revenues from taxes for October were off almost 5 percent from October 2007 ($58 million) and $123 million below expectations for balancing the state's $28.2 billion FY 09 budget. The governor is seeking to reduce that spending plan by more than $1 billion. Tax collections for the first four months of the fiscal year are off $30 million from a similar period in 2007 with sales tax revenues and corporate and business taxes leading the downward trend. Monthly tax revenues are now expected to remain below 2008 levels until at least May or June, 2009.
Gov. Deval Patrick amended the $1.4 billion compromise supplemental budget passed by the Legislature in informal session. The Legislature had approved withdrawal of $200 million from the Rainy Day fund and $100 million from the pension fund, but rejected increased municipal taxes and larger health insurance contributions by state employees for now. The governor went along with reductions in planned investments in the life science and clean energy industries, but vetoed further reductions in the volunteer Commonwealth Corps and asked for increased discretion for the DOR Commissioner to design a tax amnesty program in 2009.
2009 legislative agenda
Although the bill filing deadline is still two months away, it appears certain that, with current allegations of scandal against so many on Beacon Hill, ethics law changes will be a subject that will be addressed. The governor has formed a 12-member public integrity task force (the fact that we need such task force says it all) with the charge to report back with recommendations in two months.
The governor has not decided whether to make another attempt to legalize casino gambling in the wake of the voter-approved referendum to ban dog racing.
Clearly, the economy will affect the state budget debate, as well as other legislation that affects small businesses and their workers. The UI Trust Fund balance has begun to decline as unemployment increases, and UI taxes are likely to automatically increase in 2009. The state's budget woes have already caused a diversion of $9 million in payroll taxes paid by employers and earmarked for worker training to the state's general fund.
And in D.C.
The power of the small business voting bloc was again evident in the 2008 election. Nationally, 81 percent of NFIB-endorsed candidates for U.S. Senate, U.S. House and governor were victorious. In Massachusetts, 71 percent of NFIB-endorsed legislative candidates were elected.
The IRS's 2009 Small Business/Self Employed Tax 12-month wall calendar is available. It contains business tax information and day-to-day reminders, including the 2008 Economic Stimulus Act, Section 179 Expensing, Minimizing Identity Theft, and Disaster Recovery for small businesses. You can download the business tax dates and reminders to your Microsoft Outlook calendar, and access the calendar via electronic organizers and portable hand-held devices. To order call 800-829-3676 or go to www.irs.gov.
