New Forecast Shows Even Bigger Impact of Low Commodity Prices
Despite months of downplaying the near and mid-term economic realities, this morning, the State released its new revenue projections and it is far worse than even the most conservative estimates had predicted.
A $1.074 Billion shortfall for this budget cycle is now being officially predicted.
Many of the predicted short-term band-aids that have been discussed are already being planned.
On Page 3 of the new revenue forecast, we can see that the current path to balancing the budget now is to drain $497 million from the Budget Stabilization Fund's $574 million balance (a.k.a. Rainy Day Fund), to immediately allot (cut) 4.05% across the board from all agencies except K-12 Education, and to run the state's ending fund balance down to almost zero.
The first obvious critique of this approach is, why not just have a 5% allotment and at least have a little bit of a buffer?