Thursday, February 16, 2012

State budget gets second shot of good news this month

The state revenue collections are looking up for the first time since the spring of 2010, giving state budget writers a second bit of good news for the month.

The Economic and Revenue Forecast Council met this morning and adopted a revised forecast for the current biennium and the first forecast for the 2013-15 biennium.

In the current biennium, revenues are expected to grow by about $45 million.  The forecast shows an increase of about $96 million, but $51 million was part of the budget proposal adopted in December 2011.  That funding was due to HB 2169 which dealt with earlier collection of unclaimed property. 

Last Wednesday it was announced that a reduction in the demand for state services has saved the state around $340 million.  All this good news has reduced the current budget shortfall from about $1.5 billion to more like $1.1 billion.

"It's the first positive forecast we've had in nearly two years," said House Ways and Means chair Ross Hunter, "so of course I'm happy to see it.  However, much of the uptick is due to policy changes we made in December.  We're still fighting the effects of the recession and need to temper our optimism with caution."