The Legislature’s Joint Economic Outlook & Revenue Assessment Committee has convened in the JFAC room this afternoon, to vote on its report to the Legislature on the projected tax revenue for the coming year. Anticipated revenues determine how high the Legislature can set the state’s budget for next year. First off, they’re hearing a detailed presentation from Derek Santos, Gov. Brad Little’s chief economist, on the executive revenue projection.
Santos said the state Division of Financial Management did three things differently this year with regard to the revenue projection: It extended the forecast out five years, instead of three. It included, along with the baseline projection, a pessimistic and optimistic scenario. And it calculated probabilities for each of those three.
The pessimistic scenario was assigned a 35% probability; it includes a recession in fiscal year 2021. The optimistic scenario has a 10% probability. The baseline: 55%.
The executive revenue forecast, under a composite of the three scenarios created through use of a weighted average, is for 6.1% revenue growth in the current year, fiscal year 2020; 4.2% next year, in fiscal year 2021, the year for which lawmakers will set budgets during the current session; and in the following year, fiscal year 2022, 3.5%. You can watch the EORAC meeting live online here.
At the same link, you can also watch the Change in Employee Compensation (CEC) Committee, which is meeting this afternoon in room EW 42 at the same time, and reviewing testimony from agency directors and submitted by state employees on state worker pay and benefits.