The state’s Economic and Revenue Forecast Council released its quarterly forecast yesterday that projects decreased state tax revenues over the next two biennia and stagnant growth in the current biennium.
The forecast decreased by $483 million for the upcoming 2023–25 biennium and by $541 million for the following 2025–27 biennium.
A slowing housing market, a dip in personal income, and a likely increase in interest rates are among the key causes. The economists responsible for the forecast could not fully account for the recent banking failures’ impact on the state economy, given how recently they occurred. Total revenues, for which legislators can spend, for the upcoming biennium starting July 1 are now projected to be around $65.7 billion. While not disastrous, the chair of the Senate Ways and Means Committee said during the Council’s presentation that spending goals would need to be curbed.
This forecast is crucial as it serves as a roadmap for both the Senate and House operating budgets, which are scheduled to be unveiled this and next week – kickstarting final budget deliberations before the legislative session concludes on April 23rd.