May could bring spring flowers and bad budget news
Could a nasty May surprise await lawmakers?
State Economist Tom Stinson this week appeared before the Senate Finance Committee and outlined an economic scenario that could bite lawmakers late session.
Stinson, in giving an economic overview, spoke of the difficulties of monitoring and predicting revenue from capital gains. It’s a complicated issue, and hard to model for, he explained.
The capital gains picture could become clearer in May, near the end of the legislative session, he pointed out.
“We hope it’s zero,” he said of an increase in the state budget deficit.
“But it could be in the area of $200 (million) to $300 million,” he said of the possible loss of revenue.
The budget news is not good.
It’s anticipated that Gov. Tim Pawlenty may face the prospects of additional budget unallotments to balance out this two-year spending cycle.
Everyone expects that the projected $4.8 billion state budget deficit for the new spending cycle will be bigger than projected back in December.
