The Council on Revenues’ latest forecast was revised upward a half percent for the fiscal year ending this summer: to 12 percent, about a 20 million dollar difference in likely tax intake. Next fiscal year was revised upward a full percent, about a $40 million bump.
"These are good signs and it shows the economy is in recovery and that we’ve gone through the worst, and there’s light at the end of the tunnel," said Finance Director Kalber Young.
But it doesn’t mean there’s that much more to spend – the governor’s budget had been drafted on a much larger 14.5 percent increase in this fiscal year, then cut back after the council posted a less optimistic number at its last outlook.
"This gives a little bit of room, but we’re not about to release or relax on our conservative measures at this point, because it largely depends on actualization of those revenues," Young said.
The current long term financial plan had $150-300 million annual shortfalls between 2014 and 2017 when the council dipped projections last time. The later years forecast bumped up this time.
"Increasing 1 percent in each of those years actually helps negate or reduce — nearly eliminate — all of those shortfalls."
Lawmakers say they’re hesitant to pledge the possible extra money on spending measures. Things like an oil price spike could impact tourism; federal spending is in flux while tensions between Iran and Israel mount.
"Given these three clouds on the horizon are so threatening, it’s good news, but let’s wait and see and not get too excited about it," said House Minority Leader Gene Ward.
Meanwhile Wednesday the house unveiled its budget bill, which aims to put $50 million toward unfunded state worker pension liabilities. Still unknown, though are the costs of making good on the "favored nations" clause in the largest public worker union’s contract giving them as good a deal as any other union bargain that finishes later, and lots of contracts are still in flux.
"So even when we’re talking about any thought of a positive ending balance in this year, that may be largely eroded by what happens through the collective bargaining process before the end of this year," Young said.
See the original article at: KHON2 Local News
