Despite the state’s healthy financial state and historic tax revenue, its long serving Treasurer is sending a very clear message to lawmakers about its saving accounts.
“I want to make a little bit of a comment about the Rainy Day Fund. The Rainy Day Fund is for rainy days, not necessarily like today,” Treasurer Deb Goldberg said.
Goldberg was speaking with the hosts of the WCVB’s On The Record when the third term Treasurer said that revenues have been unusually high due to one-off circumstances like the COVID-19 pandemic and the following recovery, but that the state’s financial position could shift suddenly.
“Things are a little volatile,” she said. “The debt ceiling has come into question and that could have a serious impact on our economy.”
Lawmakers in Washington D.C. were warned Thursday that the country had reached its debt ceiling and would default on its debt by June if something were not done to raise it. Republicans in the House have signaled they may be willing to allow a default if, according to them, it reins in spending.
The Commonwealth Stabilization Fund, usually called the Rainy Day Fund, is currently sitting at an all time high, Goldberg acknowledged, but it was low enough before she took office that it resulted in the state’s bond rating going down. It’s now high enough that the Commonwealth’s financial outlook looks positive, according to Goldberg.
“It was essential that we had to rebuild the rainy day fund,” she said.
Questions of what to do with extra state money are at the forefront lately, after an all but forgotten section of the state law was triggered last year for just the second time since its passage in 1986, sending nearly $3 billion in state revenue back to taxpayers.
Even after that, Massachusetts ended last year with $7 billion set aside for a rainy day and a $5 billion surplus.
Goldberg says it’s impossible to say if more will need to be sent back to taxpayers this year, she won’t see those numbers until May, she said.
The state’s accountant also had a few words about sports betting, which will go live at casinos January 31. According to Goldberg, the tax revenue from the new industry probably won’t equal estimates and, in addition, doesn’t benefit people the same way the state’s lottery does.
“I’ve heard numbers between $35 million and $50 million,” she said. “We have to remember something. The lottery is in my office. On hundred percent of the ‘profits’ of the lottery are distributed to every single community throughout the state, benefiting those that live there.”
“Sports betting is a for-profit business. They are in it to make money. The tax revenue that they pay is merely a drop in the bucket to what they will ultimately make,” she said