The state’s panel of economic experts has raised its budget projections for this year and next, as the state’s economy shows signs of improvement. The state Board of Economic Advisors Wednesday met to review this years numbers and make its budget projection for FY 2011-12. They added $50 million to each year. Legislative budget writers work from this figure as they set up the state government spending plan.
Brand new BEA Chairman Chad Walldorf says, “We did feel comfortable moving up the projection by about one percent or $50 million for both this budget year and part of the base for next budget year as well.”
That is better news than expected as legislators are now wrestling with ways to offset a couple of agency deficits and gaps left by one-time federal stimulus funds.
The reason for the optimism, albeit cautious, says Walldorf, are most recent income tax and corporate income tax collections. Both were ahead of plan and ahead of where they were last year. However, the December sales tax figures were flat.
That keeps us somewhat cautious in term of projections going forward. If it weren’t for the December sales tax number, I think would have been a little more optimistic and bullish going forward, but taking a wait and see attitude given the sales tax number.