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OMB: State closed 2023–25 biennium $176 million above estimate; early 25–27 revenues lag forecast
Summary
Joel Morrissette of the Office of Management and Budget told the Budget Section the state closed the 2023–25 biennium with a larger balance than legislators expected but that early 25–27 revenue collections are running below the forecast by roughly $49 million through August.
Joel Morrissette of the Office of Management and Budget told the Budget Section the state finished the 2023–25 biennium with a stronger balance than anticipated and a mixed start to the 25–27 biennium.
The state ended the 23–25 biennium about $116 million higher than the legislative revenue forecast used in the budget process and closed roughly $176 million above the estimate when combining higher beginning balances and lower required transfers into the budget stabilization fund, Morrissette said. He described roughly $326 million in 'turn back' — authority that was authorized but not spent and returned to the general fund — about $40 million more than policymakers expected, with the Department of Human Services accounting for most of that variance.
Morrissette said agency‑level detail shows the top six agencies account for about 94% of turn‑back amounts and highlighted that Department of Corrections saved roughly $4.3 million in general funds by applying unspent federal recovery authority to salary costs where allowable.
Turning to the new biennium, Morrissette said collections for July and August are about $49 million below the legislative forecast (about $39 million below for August alone), citing timing issues related to weekend and holiday month‑end processing that may shift revenues into September. That shortfall partially offsets the positive starting balance, leaving a projected ending balance of roughly $126 million above the legislative estimate after the two months.
Morrissette also reviewed special‑fund balances: the budget stabilization fund remained about $10 million over the statutory target after earnings eliminated the need for a general‑fund transfer; the foundation aid stabilization and social services funds started the biennium near expected levels; and oil tax receipts and effective tax rate metrics (an effective rate currently near 9.25% based on two months of data) will be tracked going forward.
He called out a set of required reports (fiscal irregularities, federal grant pre‑applications) and summarized FTE pool usage, vacancy savings and carryover authority. Morrissette told lawmakers the OMB would work with the Tax Department to provide more detailed breaker reports on exemptions such as stripper‑well discounts at their request.
The committee did not take formal action on Morrissette’s presentation. Morrissette said staff would return with more current balances at the next briefing.
