The Economic and Revenue Forecast Council today approved an updated Outlook for the state budget prepared by the state budget outlook workgroup. The Outlook extends through the 2015-17 biennium and covers a roll-up of three state accounts: the general fund-state, the education legacy trust account and the opportunity pathways account.
The new Outlook incorporates preliminary estimates of the maintenance level increases to be included in the governor’s 2014 supplemental budget proposal, which is due in December. The total value of these maintenance level increases is $163, taking overall spending to $33.66 billion. The expected unrestricted ending balances in the three accounts total $215 million. In addition there would be $583 million in the budget stabilization account (the “rainy day fund”).
Looking forward to 2015-17, continuing appropriations at the existing fiscal year 2015 level costs $34.33 billion. The maintenance level items grow to $307 million. Other spending items required under current law add $1,743 million. (The three largest of these are $339 million for pensions, $296 million for low income health care and $260 million for educator pay increase under Initiative 732.) Altogether, spending would be $36.24 billion. This sum does not include moneys to increase K-12 funding in response to the Supreme Court’s McCleary decision.
The official revenue forecast for 2015-17 is $36.25 billion. According to statute, the revenue used in the Outlook for 2015-17 is to be the greater of the official forecast or an assumed revenue increase of 4.5 percent per year for the biennium. The latter assumption implies revenue of $36.41 billion for the biennium. Using this value for revenue, the projected 2015-17 ending balances in the three accounts total a scant $59 million. The ending balance in the budget stabilization account is $945 million.
More on the budget outlook process, including a description of the methodology used to prepare the current Outlook is available here.