More Bad News for Revenue; Time to Act

First, the good news. For the first time since September 2007, revenue expectations are higher than the previous estimate, albeit by only $31.5 million.

However, the Supreme Court decision in the Dot Foods case and other non-economic factors will cost the state $149.7 million. On net, the new revenue forecast is lower than the November forecast by $118.2 million. Much of today’s bad news can be canceled out by permanently repealing the Dot Foods exemption, as is done in HB 3176.

Unless the federal government passes an extension of state fiscal recovery funding very soon, today’s release (combined with Wednesday’s of cost projection update) will be the last piece of information on the budget shortfall before the budget is inked, something that has to happen in less than four weeks. Now that we know the size of the problem, there can be no more delays in finding a balanced solution.