Legislative budget analysts said tax collections in the first quarter of the fiscal year have been so sluggish that they have revised revenue projections downward. Now, the deficit for fiscal 2010 is $2 billion.
In order for the state to collect the $7.1 billion it anticipated this year, revenues would have to grow by nearly 1 percent from the prior year. However, collections are down 16 percent after the first three months.
A group of financial advisers told lawmakers this morning that they believe revenues will decline 7.2 percent in fiscal 2010, but the Joint Legislative Budget Committee said it recommends using its more pessimistic forecast of an 8.7 percent drop in collections.
Last month, JLBC estimated the state was facing a $1.5 billion deficit this year. However, with the new revenue predictions, that number has climbed to just shy of $2 billion.
Revenue shortfalls account for $700 million of that estimate. It also includes nearly $480 million in deficit from the previous year, $483 million in spending created by Gov. Jan Brewer’s budget vetoes in September and $135 million in increased caseloads on public health care.
It also includes revising estimates of cost-saving measures in the budget, such as reducing fraud in the public health care system and selling state assets, to be $165 million less than originally anticipated.