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  • Andrew Napolitano

Treasurer Goldberg Joins House and Senate Committees on Ways and Means and Executive Office for Administration and Finance for Consensus Revenue Hearing

Today, State Treasurer Deborah Goldberg joined the Massachusetts' House and Senate Committees on Ways and Means and the Executive Office for Administration and Finance for a virtual consensus revenue hearing to discuss the Fiscal Year 2022 revenue projections and economic outlook for the Commonwealth. Treasurer Goldberg discussed the challenges faced by our state and communities amid the pandemic and how Treasury will continue to provide revenue and critical services next fiscal year. Below are the Treasurer's remarks prepared for delivery:

As prepared for delivery:

Secretary Heffernan, Chairman Michlewitz, Chairman Rodrigues, and members of the Committee --

I always appreciate the opportunity to have an open conversation with you about our revenue projections and the fiscal outlook for Massachusetts, particularly during this turbulent time.


I am happy to report that investor demand is strong for Commonwealth bonds. Last week we completed our annual Revenue Anticipation Notes offering and received over $7 billion in orders for $1.2 billion of notes for sale. We were able to upsize the deal to $1.5 billion and tighten the pricing [final yields ranged from 0.14% for tax exempt to 0.25% for taxable].

We had similar strong investor demand in our GO [General Obligation] bond sale in November. Since the pandemic we have issued almost $1.4 billion in new money bonds and $1.5 billion of refunding bonds in issuances in July and November. The refunding bonds will provide the Commonwealth with over $298 million, or 20%, in debt service savings. Specifically, they provided for $135 million in debt service savings for Fiscal Year 2021 and $109 million in debt service savings for Fiscal Year 2022.

Throughout the pandemic, we have been in regular contact with the three national rating agencies. Overall, they have been impressed with our response to the pandemic. S&P stated in their November ratings report, "The stable outlook reflects our view that Massachusetts' strong Stabilization Fund provides a cushion allowing the state to ride out the current pandemic-related economic slowdown without significant liquidity pressure.

This supposes that the Commonwealth's economy will rebound after Fiscal Year 2021, and that Massachusetts will rebuild its BSF [Benefit Stabilization Fund] once the economy is again in an expansionary mode."

We also recently updated our bondholder website,, and on this site you can find copies of all the recent ratings reports. Additionally, you might enjoy seeing pictures of the Commonwealth's November bond sale up in lights in Times Square!

Pension Fund

While economies and markets globally have been severely impacted by the pandemic, I want to assure everyone that the Massachusetts Pension Reserves Investment Trust (PRIT) Fund remains well positioned to navigate these challenging times. It has not experienced any liquidity issues whatsoever, and has paid out $1.5 billion to beneficiaries over the last 12 months.

I am also pleased to report that despite an uncertain investment environment, the third quarter was very strong, and the Fund now stands at $80 billion, an all-time high.

These gains are the result of a carefully constructed portfolio that has consistently performed well in both up, and perhaps more importantly, down markets. And thus far the fourth quarter has continued on the same trajectory. As the market has continued on an upward trend since the election and encouraging news about the COVID vaccines, the PRIT Fund has remained on solid footing.

As Chair of the PRIM Board, I recognize the concerns and hardships that public employees, retirees, and their families are experiencing due to COVID-19. I want to assure them, and you, that we expect and have planned for more volatility and will continue to monitor and manage the portfolio with the same prudence and care as always.

Unclaimed Property

Moving on to Unclaimed Property, I am pleased to report the Division continues to provide superior service to the people of Massachusetts, even during these difficult times.

Unclaimed Property anticipated a total reversion of approximately $81 million for Fiscal Year 2021, and met that goal.

Looking ahead to Fiscal Year 2022, I am pleased to announce that we are increasing the reversion number to $98,750,000 million, a net gain of over $17 million over our Fiscal Year 2021 estimate. This increase is possible because of liquidation of stocks that were held for the required three years. The stocks are now available to be sold with the cash coming back to the Commonwealth.

Unclaimed Property employees have been working remotely since the beginning of March, with the same functionality as if they were on site. Because of this, I am happy to report that during this time we have reunited tens of thousands of individuals with over $81 million in unclaimed cash, along with millions of dollars in stock and mutual funds.

Massachusetts State Lottery

Turning now to the Massachusetts State Lottery. As you may recall, sales of all Lottery products dropped sharply at the onset of the pandemic.

The Lottery projected $940 million in net profit for Fiscal Year 2021. Moving forward, if the Commonwealth needs to reinstate stricter retail restrictions to preserve public health, without access to online sales, this will cause the Massachusetts Lottery to again see significant lost sales across all product lines. With fewer people going into retail stores than currently are, we would experience greater reduced sales.

States with online lotteries have done far better than we have, and will continue to be better positioned for any future crisis.

For Fiscal Year 2022, the Lottery is projecting $960 million in net profit. However, significant changes in customer behavior, first occurring pre-pandemic and now greatly accelerated, give us a number of concerns for fiscal year 2022 and beyond.

One of the profound consequences of the pandemic is the impact of remote work. Many experts agree that when business returns to "normal," a significant number of people will continue to work remotely, either full time or part time.

Data estimates that in 2017 only 3.4% of the U.S. workforce worked remotely. It is now believed that even after the pandemic, 20% of employees will continue to work from home. This change in people's normal routine will impact their regular visits into convenience stores, gas stations, and markets in the morning, or afternoon during what would have been their normal commutes. Removing these trips also removes the opportunity to purchase lottery products.

Additionally, the Massachusetts Lottery has always benefited from customers who live in New Hampshire and Rhode Island who came into the state for work. Many will no longer routinely be coming as their employers switch them to remote work options. Additionally, these states offer iLottery, providing their residents with a more convenient opportunity to make lottery purchases from their homes. It is unrealistic to think these former customers will make special trips to Massachusetts simply to play our lottery.

Another consequence of the pandemic is the emergence of increased delivery services used by restaurants, retail stores, and supermarkets. DoorDash, GrubHub, and Instacart have fundamentally changed the business model. Others such as CVS have also adopted home delivery and curbside pickup. Across the economy, 32% of consumers say that curbside pickup is important to them. Today 57% of retailers across the country offer some form of what is referred to as "last-mile" fulfillment, and that too is expected to grow. While these developments were necessitated by the pandemic, they are likely to have a permanent impact on consumers and in turn, our Lottery's sales, which ultimately translates to reduced revenues for cities and towns.

As we manage this ongoing uncertainty and these technological changes, your continued operating and capital support of the Lottery is essential.


Moving on to the ABCC. The pandemic has taken a major economic toll on restaurants and bars across the state, dealing a significant blow to the more than 9,000 licensed establishments.

Recognizing the strain on these licensees and their employees, the ABCC took immediate administrative action back in the spring and issued an order relative to outstanding bills owed by impacted license holders. Working with the Massachusetts Restaurant Association and the Massachusetts Wholesalers, the ABCC implemented a payment plan for impacted businesses which served to alleviate shutdown-related cash flow constraints and the repayment plan has been successful.

In addition, the ABCC has become an important member of the Governor's COVID Enforcement and Intervention team and has visited and inspected over 12,000 licensed locations throughout the Commonwealth. Results of these inspections have shown that 97% of licensees are in compliance of the Governor's Executive Orders.

In Fiscal Year 2020, the ABCC brought in $5.11 million and projected $5 million for Fiscal Year 2021. However, we will not have an accurate picture of that number until the first week of January, as we await the numbers showing how many licensees have chosen to renew.

The outlook for Fiscal Year 2022 is not strong.While too early to predict with precision, industry experts estimate that we may see upwards of 25-35% of retail licensees and 15-20% of state licensees not renew. Such a precipitous drop would result in a reduction of revenue of 15-20% for Fiscal Year 2022 [a projected range of $200,000- $350,000 total, coming from reduction of license renewals].

My team at the ABCC will continue to monitor the impact of this pandemic on local businesses. We stand ready to work with you to find innovative solutions to assist and revive these local and statewide economic engines.


Thank you again for inviting me testify today. I know we will have many more conversations about these issues in the weeks and months ahead. I look forward to our continued collaboration, as you develop our state budget.

Happy to answer your questions.




Andrew Napolitano

Communications Director

(617) 367-9333 x614

Cell: (781) 403-0600


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