Final GR Estimate, Different Priorities Set Stage for Tough Budget Process
The General Revenue (GR) Estimating Conference met recently to determine how much money will be available to the 2017 Legislature for the new state budget. This was the last meeting before the budget is finalized, so lawmakers finally know exactly how much they can spend (absent any measures they may pass that affect revenue, such as tax cuts). The news was not bad, but anyone hoping for a large infusion of funds into the process was disappointed. There will be $77.8 million more available that previously estimated last December.
The Conference increased its revenue forecast by $106.8 million in the current year (FY 2016-17) and by only $8.4 million for the next budget year (FY 2017-18). This $115.2 million in additional revenue collections over the two years is partially o set by additional emergency hurricane spending that occurred since the last estimate.
The state is now expected to collect $29.559 billion this year and $30.718 billion next year. These amounts represent growth over the prior year of $1.234 billion (4.4 percent) and $1.257 billion (3.9 percent), respectively. For the rest of the years in the forecast horizon (through FY 2021-22), growth ranging from 3.3 percent to 4.3 percent is expected.
The underlying state and national economic estimates were largely unchanged. The estimate of revenue coming in from the various GR sources was actually increased by only $5.0 million over the two year- period; up $32.8 million in the current year but down $27.8 million in FY 2017-18. However, lower than expected corporate income tax refunds caused estimated refunds to be scaled back considerably: $110.2 million over the two years. Refunds were the largest single change in the new forecast. Fewer refunds increase the GR bottom line, so it is now estimated that net GR collections will be $115.2 million more than the previous estimate.