March 1, 2017
Secretary Kristen Lepore
Executive Office for Administration and Finance
State House, Room 373
Boston, MA 02133
Secretary Stephanie Pollack
Massachusetts Department of Transportation
10 Park Plaza, Room 3170
Boston, Massachusetts, 02116
RE: March 2017 Certification of MBTA Base Sales Tax Revenues and Dedicated Sales Tax Revenues for FY2018
Dear Secretary Lepore and Secretary Pollack:
Pursuant to Massachusetts General Laws (MGL) Chapter 10, Section 35T, this letter certifies for FY2018 the following amounts: 1) MBTA Base Sales Tax Revenue; and 2) MBTA Dedicated Sales Tax Revenue. This certification was done in consultation with the Department of Revenue. The details of the two calculations are shown on the accompanying attachment.
- Base Sales Tax Revenue Amount: The base revenue amount for FY2018 is calculated by comparing the change in the calendar year 2016 consumer price index for all urban consumers for the Boston metropolitan area as determined by the Bureau of Labor Statistics of the United States Department of Labor to the per cent increase in gross sales tax revenues received pursuant to MGL Chapters 64H and 64I for the same period. The calendar year 2016 “gross sales tax revenues” is defined as sales tax receipts by taxpayers from nonexempt sales, less amounts abated, refunded, or reimbursed. Attachment No. 1 presents the calculation of the base revenue amount. The percentage increase in the base sales tax revenue is the lower of the percent increase in gross sales tax revenues or the inflation rate.
I certify to you that the base revenue amount for FY2018 increased by an amount of $14,614,985 compared to the FY2017 figure of $992,191,784 due to the inflation rate of 1.473%. The base revenue amount for FY2018 is $1,006,806,769.
- Dedicated Sales Tax Revenues (projected): The projected dedicated sales tax revenue is the amount of “monies received by the Commonwealth equal to one percent of the gross receipts of a sale as defined by the provisions of MGL Chapter 64H and one percent of the sales price of a purchase as defined by the provisions of Chapter 64I from that portion of the taxes imposed under the provisions of said Chapters 64H and 64I as excises upon the sale and use at retail of tangible property or of services, and upon the storage, use or other consumption of tangible property or of services, including interest thereon or penalties plus commencing in fiscal year 2015, the amount of $160,000,000 in each fiscal year thereafter but not including any portion of such taxes imposed on the sale of meals as defined in paragraph (h) of section 6 of Chapter 64H”. Based on the most recent FY2018 consensus revenue estimate of $27.072 billion, the dedicated sales tax revenue amount for FY2018 is projected to be $1,001,000,000, as calculated in Attachment No. 2.
Any shortfall between dedicated sales tax revenue and the base revenue certified above will be made up by quarterly transfers from the General Fund, pursuant to the MOU and Chapter 10, Section 35T(b). Based on the attached calculations, the shortfall between FY2018 dedicated and base tax revenues is estimated to be $5,806,769.
Should you have any questions on the calculation of this amount, please feel free to call me or Howard Merkowitz, Deputy Comptroller.
Thomas G. Shack III
Comptroller of the Commonwealth
Cc: Senator Karen Spilka, Chairwoman, Senate Ways and Means
Representative Brian Dempsey, Chairman, House Ways and Means
Deborah B. Goldberg, Treasurer and Receiver General
Michael Heffernan, Commissioner of Revenue
Adriana Campos, Senate Ways and Means Budget Director
Justin Sterritt, House Ways and Means Budget Director