More Budget Woes

The Revenue Estimating Conference met today to revise the revenue estimate for FY 2010 and set the revenue estimate for FY 2011.

The previous estimate for FY 2010 was $5.843, or -1.4 percent compared to actual adjusted FY 2009.  The new estimate is $5.438 billion, or -8.4 percent compared to FY 09.  This is $415 million lower than the estimate used to create the FY 2010 budget.

When the ending balance is taken into account, the budget is $315 million short for FY 2010.  Also by law the Governor is required to refill the $45.3 million taken from the EEF to balance the FY 09 budget. In order to balance the budget he would need to order a 6.2 percent ATB cut.  If he not withstands the EEF language, he would need a 5.4 percent ATB cut.  However, it will have to be bigger than that because he has to leave a cushion in case the December or March estimates are lowered.

The initial estimate for FY 2011 is $5.412 billion, or -0.4 percent compared to the new estimate for FY 2010.  The spending gap is at least $1 billion for FY 2011 but we will have more accurate numbers once Fiscal Services updates the general fund balance sheet.

It is expected the Governor will enact an across the board cut within the next few days.  The Governor’s spokesman suggested it will be larger than 5.4 percent.  Stimulus funds will not be impacted by the ATB cut.

While the national economy is partially to blame, the spending and borrowing of the Democrats has contributed to the problem. And now our children will be carrying the burden of the current administration mismanagement.