Forecast: Economic outlook unchanged

The state’s Economic and Revenue Forecast this afternoon approved a new economic forecast that is largely unchanged from the September forecast.

It is noteworthy because the economic forecast generally informs the next state revenue forecast, due out Nov. 17. It’s that forecast that will tell state budget writers how much money they have, or in this case, don’t have. The state is currently facing a budget shortfall nearing $2 billion.

Based on today’s report, there’s little hope the Nov. 17 revenue forecast will offer a surge in anticipated tax collections to reduce that shortfall. As of Wednesday, actual tax collections were $2 million below what was forecast in September, a tiny variance.

Arun Raha, the state’s chief economist, cited continued economic uncertainty in Europe and disappointing employment growth as major contributors to the significant risks still facing the state economy. He noted that, should Greece default on its sovereign debt, it could set off a chain of events that could lead to a banking crisis in the U.S., sending the U.S. economy back into recession.