Not-So-Happy Fiscal New Year
No confetti showers or champagne toasts greeted today’s start of the new fiscal year. Instead, there’s massive uncertainty.
“I’m assuming you’re not betting your house on your forecast?” State economist Jim Richardson asked.
“I’m not betting any of my money on this,” Legislative fiscal anaylyst Greg Albrecht replied, with a rueful laugh.
The Revenue Estimating Conference met Thursday, in order to recognize revenues raised during the second special session.
“We’ve got $371-million worth of total tax, license and fee revenue increase for FY 17. We have $245-million worth of dedications, leaving us with $126-million worth of General Fund direct increased revenue estimate,” Albrecht announced. “I do need to point out that there are a number of instances where we have unknown increases, and there are a variety of bills on here that have unknown decreases.”
As an example, Albrecht cited the first special session bills to “clean” pennies of sales tax. They inadvertently removed the sales tax exemptions for non-profit organizations, and it’s unknown how that affects revenue collections. In the second special session, non-profit sales tax exemptions were reinstated, and it’s still unknown how that will change the numbers.
Noting that many of the big changes affect corporate income taxes, REC chair Jim Richardson also said, “That means we probably will not know the results then till almost the end of Fiscal Year 2017.”
“You’ll have some information accumulate, but the bulk of this is going to be in the spring of next year,” Albrecht confirmed.
Richardson also asked about the fiscal year that was ending yesterday. Earlier this month, he had told the administration to expect a $200-million shortfall for the year, because corporate tax collections were well under what had been predicted.
“Right now we do not have any final information at all, to speak of, so we will not know that till after August 14th. Is that correct?” Richardson asked Albrecht.
“You mean FY 16 finish or finals?”
“Whatever they might mean for FY 17 numbers,” Richardson clarified.
“Right, yeah, we won’t, uh – after the August 14 close, they still have, I think, till like September one to do final reporting and so we – it’s sometime in late September.”
In other words, no one but a small group of legislators believes there will be a magical manifestation of money to save the state.