ST. PAUL, Minn. (AP)—State revenue collections still show a deficit that will wipe out the $450 million "rainy day" fund by the end of the current two-year budget period, legislators have been told.
A memorandum prepared by Senate researchers said revenues for July, August and September—the first quarter of the new fiscal year—are running "slightly ahead of expectations."
The expectations, however, were for a shortfall that would use up the rainy day fund created as a cushion for the state budget.
The research report to members of the Senate on Tuesday said that, if the present pattern continues, the $450 million budget reserve will be drawn down with the budget near balance at the end of the biennium.
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Finance Commissioner Jay Kiedrowski called the conclusions "premature."
Kiedrowski said his department will have new projections of state finances Oct. 22 for the second quarter of the new fiscal year.
Kiedrowski said there is a possibility that the new forecast will use different figures from those the state has been working on since spring. Instead of making a single budget forecast, Kiedrowski has predicted possible shortfalls of $134 million, $533 million or $811 million, depending upon economic conditions.
Those figures "may be altered in the new forecast to reflect changing situations," he said Tuesday.
State revenues were slightly ahead of expectations in July but dipped in August.
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Exercise 16.3
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2007 McGraw-Hill Higher Education