CLIENT MEMO - Apr 11, 2024

As the end of the fiscal year approaches on June 30, state budget negotiations take on added importance.

Today, the Finance Advisory Committee (FAC) met to discuss the State’s fiscal picture, which has brightened a bit in recent months.

At FAC’s last meeting – in January – the committee forecast a General Fund budget shortfall of $1.7 billion across fiscal 2024 and 2025. Today's report has reduced that shortfall to a projected $1.3 billion across the same period – largely owing to two key factors: individual income tax refunds have been lower than expected, and insurance premium tax collections are 12% higher than last year.

State revenues through the end of the 1st quarter were strong and beat the forecast by $128 million, though economists warn that retail sales have begun to lag.

The entire FAC presentation is available online, and we will continue to track the evolving fiscal forecasts and budget negotiations.