Fiscal Bureau Releases Updated Budget

This week, the Legislative Fiscal Bureau (LFB) released a statement announcing that the state will have a closing balance of -$143.2 million at the end of the current 2011-13 budget biennium. In the report, the Fiscal Bureau said that balance is $215.9 million below the $72.7 million balance, which was projected in October 2011.

According to the LFB's analysis, the balance shortfall is the result of:

• Revenue decrease of $4.5 million from the enactment of 2011 Act 49
• $272.8 million decreased in estimated tax collections
• $6.3 million decrease in departmental revenues
• $44.5 million decrease in sum sufficient appropriation expenditures
• Reduction of $20.0 million in compensation reserves
• Reduction of $1.3 million transfer to the injured patients and families compensation reserves
• $1.9 million increase in estimated lapses to the general fund

When including the $65 million statutory balance that is currently in the budget, the projected net balance is projected to be -$208.2 million on June 30, 2012.

The LFB statement also indicates that the 0.5% threshold for a budget adjustment has been reached, which means that the Department of Administration (DOA )is currently discussing steps to address the shortfall through "continuing to find efficiencies to balance the budget, and continuing to eliminate wasteful spending," (www.thewheelerreport.com).