Boston (ap) — Massachusetts is trying to solve an economic puzzle. Unemployment is low and the economy is humming along, but tax revenues are sluggish and lawmakers are struggling to balance the state budget.

It’s not supposed to work this way.

In another recent boom during the late 1990s, the state’s economy was also buzzing. But back then, the boom was felt on Beacon Hill, too, which found state coffers flush with cash. Taxes were trimmed as officials strived to shed its “Taxachusetts” nickname that was scaring many businesses away.

Now? Revenues can’t seem to keep pace with spending, leading to chronic shortfalls in a $40 billion budget that the state’s constitution requires to be balanced.

There’s plenty of disagreement over whether the state needs to raise taxes, or tighten its belt and cut spending. But nearly all agree there’s a problem.

In March, state tax collections fell about $81 million, or 3.4 percent, below projections for the month, and it wasn’t just a blip. Overall, tax revenues are $220 million — or 1.2 percent — below benchmark with just three months left in the current fiscal year.

Democratic Senate President Stan Rosenberg says it’s been years since Massachusetts could balance its budget without resorting to what he called “gimmicks” and “Band-Aids.”

A big part of the problem, according to Rosenberg and others, is that Massachusetts is trying to apply a 20th century tax code to a 21st century economy — an economy based increasingly on internet sales and services and less on struggling brick-and-mortar stores.

Rosenberg told reporters last week that while there’s no outcry for a new sales tax on services, that discussion should be in the mix.

“The service area is very wide and deep and so it doesn’t mean that just because you’re talking about a service tax that you’re looking at taxing everything under the sun,” he said.