Today Office of Management and Budget Director Pam Sharp gave testimony before a joint meeting of the state House and Senate appropriations committees. The intent of the testimony was to give updated figures for the state’s revenue forecasts.
According to a legislative source, we got some good news and bad news.
The good news is that OMB is projecting $41,333,000 in additional revenues for the current biennium.
The bad news? OMB is projecting $45,680,000 less for the 2013 – 2015 biennium (the one the legislature is budgeting for now).
Now, that’s not a huge decline in terms of the state’s overall budget, but given that in recent years state leaders have gotten used to seeing revenues exceed projections by double and even triple-digit percentages a decline is a bit of a surprise.
To be clear, though, OMB is still projecting that the state will take in more revenues next biennium than in the current biennium. They’re just revising the projection for that increase down. Revenues are still growing, just not as quickly.
I wrote earlier today about the state’s economy peaking. This may be the surest sign yet that it’s happening. The state still has plenty of revenues, but days when the state could count on nearly exponential growth in those revenues may be over.
Unfortunately, that’s more likely to be used by state leaders as an argument against tax relief in the current session rather than an argument for spending reforms.
Update: From a legislator:
Just read your post, and I’m afraid that you’re spot-on about using this information to argue against tax cuts. We’ll still mess around with property taxes, but now the argument will be to hold onto our revenue to fund “priorities”. I, of course, would argue that reducing tax burdens most likely would INCREASE revenues to the state’s coffers because businesses would either come here or expand their current operations.