The state’s chief economist is telling lawmakers that there is still a budget shortfall for next year but it is not as wide as it was thought last October. Amy Baker briefed the Senate Budget Committee Thursday on the revised forecast. Consumer spending picked up in the last quarter of the year producing more tax revenue that lawmakers can use to balance a state budget.
"We’re definitely in recovery but it is just a slow recovery. It’s going to take several years to work out of the hole we created in the Great Recession. I mean we went back to levels we hadn’t seen in a decade. So even though we are starting to grow and we’re in recovery to gain all the ground we lost in the Great Recession is going to take a long time."
Baker says state economists have revised upwards sales tax receipts, which make up about 75-percent of the state’s revenue. But Medicaid and pre-kindergarten are costing more than expected while other expenses are down. Over-all though, Baker says the projected budget shortfall is about $200 million smaller than it was three months ago.
"I would say the range right now is one billion to one point four billion. One billion for the basic plan just off of mainly the estimating conference and other things no policy changes up to one point four if you add additional senate issues."
The reference to senate issues is the impact of implementing proposed policy changes. The House and Senate currently are at odds on how to proceed with a state budget. The Senate wants to delay finishing spending plan until later in the spring. The House wants to pass a budget during the annual 60-day session which is scheduled to end March 9th. And while Senators discussed a projected one billion dollar shortfall with Baker, Speaker Dean Cannon released General Revenue allocations showing how the House proposes to close a $2 billion shortfall.