The Revenue Estimating Conference (REC) held their quarterly meeting yester and increased their revenue estimate for FY 2008, from 4.2% to 5.1%. This means the state is estimated to experience an increase in revenues of $288.6 million over FY 2007, an increase of $49.1 million since the April 7th estimate. Revenue coming in to the state is meeting expectations for our 2007 & 2008 budget years. We are making it a priority to maintain a fiscally responsible budget while keeping our savings accounts and “rainy day” accounts full. We are currently on track to keep those committments.
REC Update – October 9, 2007 [link]
REC Update – Raw Data [link]
The REC also made their first estimate on FY 2009. The REC is estimating that FY 2009 revenues will increase by another 2.6% above the new FY 2008 revenue estimate. This means the state is projected to have net general fund receipts of $6.091 billion, which is $156.2 million more than is estimated to be raised in FY 2008. The REC will meet again in December to review both the FY 2008 and FY 2009 revenue estimates. The December estimate for FY 2009 is the estimate that the Governor and Legislature must use when crafting the FY 2009 budget during the 2008 session.
The Governor has recently recommended that executive agencies submit FY 2009 budgets that maintain status quo budgetary levels with minimal “cost of living” adjustments. According to Culver spokespeople:
One reason for the potentially slow growth in 2008-09 is that current-year growth is expected to be large, which makes it a tough act to follow. The panel said Tuesday that 2007-08 revenues should come in at $5.9 billion, up 5.1 percent from the year before. Much of the growth is because of the $1-per-pack increase in the cigarette tax earlier this year.Charles Krogmeier, Gov. Chet Culver’s top budget adviser and a member of the panel, said the 2.6 percent forecast would leave the state roughly $200 million short of the money it needs to cover built-in expenses from previous years. But he noted that much of the shortfall would be covered by a projected budget surplus at the end of the current year.”I’ve been meeting with the governor the last couple days to go over those budgets and see where we might make some adjustments to make up that gap,” Krogmeier said. He said most state agencies are being asked to submit level-funded budgets for 2008-09.