State General Fund

State General Fund Projected Balance Detailed

The state’s projected ending fund balance for this biennium is now at $228.6 million and that’s after a December 14-15 Special Session that obligated $196.8 million to K-12 education and two retirement systems.

The daily press has reported on each of the steps along the way from the $297 million balance at the end of fiscal 2005 to the $425 million outlook reported in early December. What follows is how we got to where we are now. The figures used here are those prepared by Principal Legislative Fiscal Analyst Terry Johnson, who has been estimating state revenue for the past three decades.

When the 59^th Legislature ended in April, 2005, it was with an estimated $76 million ending fund balance for the 2007 biennium. But, when the last fiscal year of the 2005 biennium actually ended in June there was an additional $135 million in unanticipated revenue. That additional $135 million was the result of an increase of $91.5 million from individual income tax, $31.9 million in additional corporate income tax, $5.5 million from a FEMA reimbursement, $4.4 million in additional oil and gas revenue, $2.9 million in additional coal trust monies, $1.2 million in coal severance monies, less $2.4 million in negatives.

Because there was to be a special session in December there was greater pressure than usual for revenue estimates to deliver new projections. The figures that were delivered for the special session were agreed to ahead of time by the Governor’s budget office and the Legislature’s staff.

This resulted in a projection of $425.4 million as an ending fund balance for the 2007 biennium. More specifically, there was the budgeted $76 million original ending balance for this biennium, plus the $135 million of unanticipated 2005 biennium revenue, plus the updated additional revenue to be collected in this biennium of $253 million plus another $12.2 million in additional reversions. That totals $476.2 million. From this amount, $38.3 million in projected supplementals and $12.5 million in adjustments need to be subtracted. That provides the widely publicized $425.4 million.

The additional revenue of $253 million is a function of continued higher amounts from personal income, corporate income, oil and gas and property taxes. The increased amount needed for supplementals is largely to deal with increases in the corrections and public health and human services departments.

The Governor’s Special Session proposals were for $100 million into the Teachers Retirement System, $25 million into the Public Employees Retirement System, $31.2 million to the ongoing expenses for K-12 education, and $33.5 million for one-time K-12 expenditures. Legislators increased the total for ongoing efforts in K-12 by $6 million and money form one-time expenses by $1 million. As adopted by the Legislature there was $196.7 million in obligations.

The $425.4 million less the special session obligations of $196.7 million gives us the projected $228.7 million ending fund balance for this biennium.

Last Modified: Thursday June 07, 2007

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