New numbers from the state budget office show Senate Republicans were correct in saying they needed to close a billion dollar hole in the upcoming budget. The trend of the state having less money to spend is expected to continue.
A conference committee of lawmakers is working out the difference between budgets passed by the House and Senate. State budget director Tim Keen told them he’s estimated state tax revenues are down $949 million from his office’s initial forecasts – with most of that shortfall in income tax collections. And he’s also revising down growth for the next two years by 1%.
“As a rough rule of thumb, this reduces the combined income and sales tax revenues by about $170 million per year from what they otherwise would be,” he said.
Keen says the sluggish economy and what he called “tax revenue weakness” led his estimates to be off. The shortfall right now is $841 million dollars, with new numbers coming after the fiscal year ends next week.