The November 2007 Revenue Estimating Conference projects a current-year revenue shortfall of $113.4 million when compared to the enacted budget and $166.4 million lower revenues in FY 2009 when compared to FY 2008 revised estimates. Coupled with increased state costs for cash and medical assistance programs, out-year budget deficits are projected to be greater than previous estimates. Current year deficits are projected to be approximately $150 to $175 million. For FY 2009 the deficit is projected to be between $380 million and $450 million.
The November Revenue Estimating Conference decreased total FY 2008 general revenues 3.3 percent to $3,359.7 million, when compared to the FY 2008 enacted budget. Major changes in estimates are attributable to the following:
- $34.8 million decrease in personal income tax revenues;
- $10.9 million decrease in business tax revenues; and
- $43.7 million decrease in general sales tax revenues.
Revenues for FY 2009 are projected to be $3,193.3 million. This represents a decrease of $166.4 million, or 5.0 percent, from FY 2008 revised numbers. Highlights of projected FY 2009 revenues, compared to FY 2008 estimates, include:
- $34.0 million increase in personal income tax revenues;
- $13.8 million decrease in general business tax revenues;
- $23.5 million net increase in revenues from sales and use taxes;
- $83.4 million decrease in departmental receipts, due to the fact that the REC does not include the hospital licensing fee of approximately $78 million; and
- $126.8 million decrease in other revenues; the majority of the difference is due to the tobacco securitization revenues from FY 2008, which are not available in FY 2009.
It should be noted that REC projections for FY 2009 are based on current law and do not include potential or proposed changes to revenues. For example, the hospital licensing fee (approximately $78 million), which must be reauthorized every year, is not included.