Revenue forecast dips for first time in two years

The state’s Economic and Revenue Forecast Council lowered state revenue projections Wednesday for the first time in two years. You can find the press release from the state budget office here.

While not projecting a recession, the new forecast for the current 2015-17 budget cycle and the ensuing 2017-19 budget cycle projects slower growth. Contributing factors include a slowing global economy, a stronger dollar hampering exports, and low oil prices.

Combined with a new forecast of demand for state services, the net change for the current biennium is virtually flat. But the revenue forecast for the following biennium is down $436 million to $40.9 billion. Though still above the $37.8 billion anticipated for the current biennium, the projected decline in growth increases challenges state budget writers are expected to face next year as they try to maintain existing services, address legal pressures for new spending on education as well as make needed investments in other areas, including higher education.

The Legislature will use this forecast to draft the re-write of last year’s two year budget that it will send to the governor this spring. The House expects to release its proposal on Monday.