The economic crisis has hit the Commonwealth hard and realized revenue from the state sales and income tax plunged. In efforts to offset the massive decline, budget cuts have been made and reforms have been initiated.  Even with these actions, Governor Patrick and the legislature must come together to further reduce spending or increase revenue to balance the budget.

On August 1st, the state's sales tax increased from 5% to 6.25%, bringing it in line with many of the other state's in the region. The Commonwealth also joined over 40 other states in the United States by closing the sales tax exemption on the sale of alcoholic beverages. By closing this loophole, the state is expected to receive close to $80 million, funds that the legislature directed to combat substance abuse and addiction problems. 

To compensate for the $128 million local aid cut in the budget, the largest one-year reduction in state history, new laws have been passed allowing local municipalities to raise hotel and meal taxes by up to 2%. However, even with these modest tax increases, there is pressure mounting for the state to consider other new sources of revenue to help bring equity to the tax code and protect vital services throughout the Commonwealth.