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State budget monitor shows $97.6 million projected shortfall but retains multi‑hundred‑million reserve
Summary
A legislative budget presenter told the Joint Finance‑Appropriations Committee that year‑to‑date revenue collections trail the forecast, producing a $97.6 million projected shortfall for the fiscal year, but the general fund still carries several hundred million dollars of cushion heading into the next fiscal year.
A staff budget presenter told the Joint Finance‑Appropriations Committee that the state faces a projected $97.6 million shortfall for the current fiscal year, but that available reserves and carryforward reduce immediate fiscal stress.
The presenter said year‑to‑date collections total about $4.7 billion and that the last two months of the fiscal year typically bring another $1.1 billion, leaving the state about $100 million shy of the adopted forecast. “Right now, we’re about a hundred million dollars behind, and so we will need to start running some surplus for the months in May and June in order to make up that shortfall,” the presenter said. The briefing noted a $420.3 million bottom line carryforward reported in the April update; removing the shortfall would leave roughly $322.7 million on the bottom line.
The staff member walked committee members through enacted 2026 budget figures and the effect of recent tax legislation. The presenter said the legislature’s adopted revenue number was roughly $6.4 billion and that several bills (including House Bills 40, 93, 304 and 231) and related measures reduced baseline revenues, producing long‑term revenue impacts. The presenter also cited a forecast adjustment that reduced the revenue estimate relative to DFM’s model and said growth projections for the year range from roughly 4.1 percent (if DFM’s forecast is realized) to 4.7 percent (the budget office’s forecast).
Committee members pressed for details about specific line items and the composition of funds. The presenter emphasized that the base budget remains the starting point for the FY2027 process and that further adjustments and the June book close will determine the actual beginning balance for FY2027. “You’ll remember the $275 million general fund cash transfer last year to the strategic initiatives program,” the presenter told members as an example of how one‑time and continuously appropriated transfers affect the numbers.
Context: The briefing combined a revenue update, an overview of how recent tax legislation affects baseline growth, and a reminder that the three‑way close in June will produce the official starting balance for next year. Committee members asked for follow‑ups on forecast drivers and how cash positions would be reported to legislators ahead of the June close.
