Figures released by legislative budget analysts Oct. 31 show state revenues continue to decline, deepening the state’s budget hole during an economic downturn that has affected nearly every state in the nation.
The Joint Legislative Budget Committee reported that September tax collections were $124.6 million short of projections. Through the first three months of the 2009 fiscal year, the state has collected nearly $305 million less than expected.
Sales-tax declines continue to be the biggest factor in the revenue shortfall. In September, the state collected $46.5 million less in sales taxes than projected. Sales in the retail and contracting sectors – two of the industries hit hardest in the bad economy – make up about two-thirds of all sales-tax collections. So far this fiscal year, sales-tax receipts from those sectors are down 8.4 percent and 17.9 percent, respectively.
Earlier this month, JLBC estimated the deficit for the current year will be $1.1 billion. However, that figure relies on a significant up-tick in revenue collections. If revenues decline 5.1 percent from the previous fiscal year, the estimate will be accurate. Right now, though, revenues for the first quarter of the year are down 8.9 percent from last year.
For the next fiscal year, which begins in July, the legislative budget agency reported that lawmakers might have to close a $3 billion hole, though that figure is dependent on the state fixing the current budget only with temporary solutions.