The state’s revenue outlook projected strong growth in an updated state economic and revenue forecast released Wednesday morning. The forecast for the current 2021-23 biennium was increased by $1.4 billion and for the upcoming 2023-25 biennium it was increased by $1.3 billion. This increases the total budget to $58.9 billion in the 2021-23 biennium and $62.1 billion in the 2023-25 biennium. The first forecast for the 2025-27 biennium shows a budget total of $66.5 billion.
The forecast was encouraged by a steep decline in COVID-19 infections and continued retail and real estate transactions. Tax collections since the last revenue outlook in November came in $452 million above forecasted, largely driven by the increase in the cost of retail goods and subsequent sales and business & occupation tax in addition to strong real estate sales. However, possible downsides to the outlook include higher inflation which may dampen consumer spending, geopolitical risks, and a possible return of COVID-19 infections.
The budget writers in the state Senate and House will now finalize their supplemental budget proposals for the current 2021-2023 biennium, which are expected to be released early next week.