LITTLE ROCK — State budget forecasters predict a 3.5 percent growth in revenue, about $161 million, for the fiscal year that begins July 1.
“We’re still showing growth, but … as you know it is tough economic times and we don’t see any strong economic recovery taking place at all,” said Richard Weiss, director of the state Department of Finance and Administration.
“There is a risk out there that we could return to the recessionary period that we’ve been in. We’ve tried to take that risk and analyze it, but we feel that the forecast we are presenting to you here today will be a good conservative forecast,” Weiss said. “We don’t see any reason to be any more optimistic than we are putting in front of you today.”
Presentation of the budget forecast is mandated under a constitutional amendment approved by voters in 2008 that requires the Legislative to meet annually, rather than every two years, and consider only budget issues in even-numbered years.
The Legislature’s second-ever budget session is schedule to begin Feb. 13.
Independent reporting for Pine Bluff & Jefferson County since 1879.
Gov. Mike Beebe is expected to release his balanced budget proposal for the 2012-2013 fiscal year on Jan. 16, when legislative budget hearings begin.
Forecasters project $4.7 billion in revenue next fiscal year.
The forecast presented to lawmakers Thursday is down from the 5.3 percent growth predicted in November 2010.
Weiss also told lawmakers that revenues for the current fiscal year are expected to be up, but that increase will be less than what was forecasted in 2010 by about $121.3 million. The reduction is due to the $35 million in tax cuts approved by the Legislature earlier this year.
Rep. James McLean, D-Batesville, told Weiss that based on the way the current national economy is struggling, “things could be much worse.”
Weiss agreed, saying that the state “has been very, very fortunate,” and that its “economy is diversified enough, and our forecasting and budgeting have been conservative to the point that we are actually weathering this … much better shape than any other state in the nation.”
Beebe suggested Wednesday he expects his balanced budget proposal to hold the line expect for slight spending increases to maintain court-ordered adequacy in public school funding.