Today the State Funding Board approved projected tax revenues for the coming year. Normally the board estimates how much the state’s revenue will grow, but this year the question is just how much it will shrink.
The board’s best estimate is that tax revenues will fall between 6% and 7%.
Because revenue is falling and unlikely to bounce back, the state is essentially dealing with a shortfall for both the current budget year and the next.
State Finance Commissioner Dave Goetz says that means the state has to figure out how to balance both budgets.
“So we have to find ways to close the books in the current year, which involves cash and spending reductions. And then for the next year we have to see how we can come to a recurring-to-recurring balanced budget.”
Goetz says the administration will make its best effort to do that in the budget it presents to the General Assembly in early February. He says today’s estimate makes no assumption about a possible federal stimulus package.
Goetz says it’s not yet clear how much money the state will take from its rainy day fund, but it will be in the hundreds of millions.
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