No revisions made to state budget

(May 9, 2008) A slowing economy and yawning state budget deficit convinced majority legislative leaders and Gov. Rell not to make any adjustments to the state budget for fiscal year 2009. As a result, the state will hold to its $18.4 billion budget for next year, which includes a 4% increase over this year’s budget. Lawmakers in 2007 approved a $36 billion, two-year budget.

Reports of declining state revenues and new projections of a state budget deficit that could top $80 million began to appear as the legislature neared its adjournment on May 7. What’s more, forecasts for continuing weak revenues already have started to cast a shadow over future budget discussions for fiscal years 2010 and 2011.
In other budget-related actions, Gov. Rell directed state agency heads to eliminate all but the most essential spending for goods and services for the remainder of the fiscal year. She also said she would invoke her statutory authority to order state agency budget cuts of up to 3%.

And Gov. Rell banned on out-of-state travel by all state personnel unless the trip is paid for out of non-state funds.

Legislative Republicans offered a “do something” state budget alternative that would cut state taxes and spending while making strategic increases in certain funding areas. The governor and majority leadership chose not to act on it, however.

It’s possible that if state revenues continue to decline sharply, legislators could return for a special session to deal with the budget. As it is, legislators are expected to return to the Capitol for a special session to extend the state’s real estate conveyance tax, which would sunset on June 30.