Consensus Revenue Estimating Conference—What do the Numbers Mean?

Jennifer Smith

By Jennifer Smith, MASB Director of Government Relations

DashBoard, May 20, 2015

The May Consensus Revenue Estimating Conference was held last week, and while the overall revenues for the state seem to be improving, the School Aid Fund revenues are slightly down.

The House Fiscal Agency, Senate Fiscal Agency and Treasury Department unanimously adopted the revenue estimates for the remainder of this fiscal year, as well as the next two. The state’s General Fund is estimated to close the current fiscal year $223.5 million more than what was predicted at January’s conference. That fund remains more than $120 million in the black for the next two fiscal years.

The School Aid Fund, however, is estimated to be $5.9 million less than the January estimate. That number also grows over the next two years to be $20.8 million less than estimated in 2015-2016 and $42.1 million less in 2016-2017.

Now that the estimates are set, leadership in the Legislature has started meeting with the Governor’s office to finalize budget target numbers. We expect the chairs of the various appropriation subcommittees to begin meeting this week to work out final numbers. The goal remains to finish the budgets by early June.

With a small decrease this year, we don’t expect the School Aid Fund budget to be cut by much, but going forward that could be a different story. These numbers emphasize the difference that tax policy changes and other statutory modifications can have on the SAF revenue stream. It also brings greater importance to the new road funding proposals as some of the past recommendations have talked about the SAF being protected through “growth.” Given the estimates mentioned above, there wouldn’t be any growth to rely on.

We will continue to keep you updated on the budget process as it is likely that the final version will look very different from any of the three current proposals.

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