July 2015 Fiscal Highlights

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July 23, 2015
Joint Legislative Budget Committee

The JLBC Staff reports monthly to the Legislature on the status of General Fund revenue collections and other fiscal issues. See the full report here. This July report provides an initial estimate of the FY 2015 year-end impacts:

  • Based on preliminary numbers, FY 2015 General Fund revenues were 5.4% above last year and are $322 million above forecast (excluding the beginning balance). Spending was also lower than expected.
  • Most of the revenue gains were from Individual Income capital gains tax receipts along with Corporate collections. Compared to these 2 volatile revenue sources, the state’s core Sales and Withholding revenues grew much more modestly.
  • While book closing normally takes 6 months, the early results are even more tentative this year due to implementation of the state’s new accounting system on July 1.
  • Given higher revenues and lower spending, a budgeted $(132) million shortfall is now estimated to be a $266 million balance at the end FY 2015. As a result, no Rainy Day Fund transfer will be needed.
  • The FY 2015 results create a larger beginning balance for FY 2016. As a result, a budgeted $(35) million FY 2016 shortfall turns into a $219 million balance by the end of FY 2016. These are one-time monies and would not support permanent initiatives.
  • The higher FY 2015 revenue base, however, is likely to result in higher FY 2016 collections and result in some permanent gain in state resources.
  • Given the unstable sources of the revenue windfall, the potential ongoing gain is still being evaluated and will be addressed in more detail at the October Finance Advisory Committee meeting.
  • While much further analysis is needed, at least $200 million of the $322 million overage is expected to continue into FY 2016 and beyond.
  • In total, the FY 2015 results may lead to a one-time FY 2016 gain of $219 million (via the ending balance) and at least $200 million in ongoing revenues.
  • A ruling in favor of the plaintiffs in the K-12 litigation, however, could add over $250 million in new spending and offset the possible ongoing revenue gain.
  • The summary of ending balance estimates is as follows:

One-Time Ending Balance Resources

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