Economists who advise the Legislature’s budget staff are turning more cautious about the state’s economy.
Private and government economists who serve the Joint Legislative Budget Committee staff’s finance advisory committee now project an average growth rate of 5 percent, down from 6.9 percent in September, for the fiscal year that begins next July 1, JLBC Executive Director Richard Stavneak said Dec. 12.
Either growth rate would be significantly lower than the revenue increases of approximately 20 percent seen during each of the past two fiscal years as the state rebounded from the recession earlier in the decade.
Revenue growth during the first four months of the current fiscal year came in at 10 percent over the previous year.
“Revenue growth has been strong so far” during the 2006-2007 fiscal year, Mr. Stavneak said. “It’s just not at the same rate as seen in the last couple of years.”
The JLBC staff uses the advisory panel’s projection as one of several elements to produce a revenue forecast for lawmakers to use when they produce the next state budget during the legislative session that begins in January.
A larger forecast means lawmakers have more money available for discretionary spending or tax cuts, while a smaller increase — or even a decrease during a recession — forces belt-tightening.