In their quarterly revenue review this morning, the state Economic and Revenue Forecast Council adopted a forecast that anticipates a $664 million increase to the state’s current 2023-25 biennial budget. This September forecast now projects the state’s total budget to be at $66.7 billion. The forecast for the upcoming 2025-27 biennium also saw an increase of $437 million, bolstering the projected budget to $70.9 billion.
Growth in personal income, state interest rate earnings, and national GDP, along with historically low unemployment, drove the increase. A number of uncertainties continue to threaten the projected growth however, including rising interest rates, vacancies in the commercial real estate market, student loan repayment plans restarting, and a possible federal government shutdown.
The state also finished the last biennium with an increase of $265 million to the underlying 2021-23 biennium that concluded earlier this year on June 30th. Much of that increase is thanks to an unexpected increase in estate tax collections.
The next revenue forecast will be released on November 26th, which will inform the governor’s 2024 supplemental budget proposal to the Legislature to be released in mid-December.