Post by IDOCO on Feb 16, 2009 16:32:18 GMT -5
Look for things to not improve for quite awhile.
Indiana revenues in January $142M below projections
Revenue collections in January fell $142 million below projections, and the state could face an additional budget shortfall of $300 million to $400 million if things don't improve by the end of the fiscal year.
Budget director Chris Ruhl said Gov. Mitch Daniels has directed the budget office to come up with more contingency measures to handle potential shortfalls. That could mean further reductions in state spending or renegotiating state contracts to find savings before the fiscal year ends in June.
But the Daniels administration doesn't want to tap into the state's reserves of about $1.3 billion. Daniels says the money could be needed later if the economy gets even worse.
"Despite the persistent downward pressure on state revenue collections, the goal remains the same - to finish state fiscal year 2009 with the state's combined balances (rainy day funds and reserves) intact," Ruhl wrote in a memo about the revenue report Wednesday.
An updated budget forecast released in December projected a $763 million spending gap in the current budget, and Daniels immediately ordered steps to make up the money and ensure that Indiana end the fiscal year having taken in more than it spent.
The steps already being taken include not giving state employees pay raises this year, cutting higher education operating costs by 1 percent and postponing spending on several planned capital projects. Agencies also had been told to make additional cuts of 3 percent on top of 7 percent reductions they already had been supposed to make.
But if collections continue to fall below projections, the state would have to find an additional $300 million to $400 million to close its budget gap.
December's revised revenue forecast has now been off by millions of dollars two months in a row. December revenues were $33 million below the new projections.
Indiana revenues in January $142M below projections
Revenue collections in January fell $142 million below projections, and the state could face an additional budget shortfall of $300 million to $400 million if things don't improve by the end of the fiscal year.
Budget director Chris Ruhl said Gov. Mitch Daniels has directed the budget office to come up with more contingency measures to handle potential shortfalls. That could mean further reductions in state spending or renegotiating state contracts to find savings before the fiscal year ends in June.
But the Daniels administration doesn't want to tap into the state's reserves of about $1.3 billion. Daniels says the money could be needed later if the economy gets even worse.
"Despite the persistent downward pressure on state revenue collections, the goal remains the same - to finish state fiscal year 2009 with the state's combined balances (rainy day funds and reserves) intact," Ruhl wrote in a memo about the revenue report Wednesday.
An updated budget forecast released in December projected a $763 million spending gap in the current budget, and Daniels immediately ordered steps to make up the money and ensure that Indiana end the fiscal year having taken in more than it spent.
The steps already being taken include not giving state employees pay raises this year, cutting higher education operating costs by 1 percent and postponing spending on several planned capital projects. Agencies also had been told to make additional cuts of 3 percent on top of 7 percent reductions they already had been supposed to make.
But if collections continue to fall below projections, the state would have to find an additional $300 million to $400 million to close its budget gap.
December's revised revenue forecast has now been off by millions of dollars two months in a row. December revenues were $33 million below the new projections.