RI revenue projections scaled back as economy slows
The years of ever-growing state revenue are coming to an end, according to new estimates from Rhode Island fiscal analysts, who on Wednesday revised down the amount of money lawmakers will have to spend in next year's budget.
While the national and regional economies have so far avoided recession, state revenue collections for the year ending June 30 are expected to come in $61 million below what was expected last year, according to new figures from the Revenue Estimating Conference.
Revenues for the year starting July 1 are now expected to lag expectations by $2.9 million, the conference analysts found.
All told, that means the General Assembly will have around $64 million less to spend in its upcoming budget for next year than Gov. Dan McKee was working with in his January budget proposal.
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If the estimates prove accurate, state revenue from various taxes and fees (and not counting any federal funding) will drop from just over $5.2 billion last year to $5.199 billion this year and then down to $5.1 billion next year.
“The updated revenue estimates are a reflection of the current economic conditions and are not unexpected. I have consistently cautioned against using one-time money for ongoing programs or tax cuts, and today’s results reaffirm the need for that caution," House Speaker K. Joseph Shekarchi said in an email about the new numbers. "As always, the House will work with our partners in government to align expectations and resources while prioritizing long-term stability for the state and its residents."
The largest contributor to the decline in revenue is personal income tax collections for the year ending in June, which the conference estimated will come in $97 million below last year's projections. Insurance tax collections were revised down about $10 million for the current year.
On the other side of the ledger, lottery revenue was revised up around $15 million, departmental receipts up $14 million, corporate tax collections up about $10 million and sales tax collections up $4 million.
McKee in a statement noted that despite the lower revenue forecast, the state "is still projected to have an approximately $600 million surplus" in the year ending June 30 "because of our Administration's prudent financial decisions."
"The slight decrease in projected general revenues that came out of the Revenue Estimating Conference today was not unexpected, but it also does not significantly change our financial landscape in the short term," he said.
This article originally appeared on The Providence Journal: RI revenue projections dialed down as economy slows
