Bartlett Center Study finds state revenue deteriorating, on track for $200 million shortfall
CONCORD - According to a new analysis by The Josiah Bartlett Center, state revenues are deteriorating making the hole in the budget much larger than previously thought. According to the study's author, Charles Arlinghaus, " In each of the last four months, state revenues have fallen further and further behind the amount needed for the state budget. Revenues will end the year at least $91 million behind the budget – and even higher if business taxes also deteriorate. The two year budget shortfall will be between $205 and $258 million."
The study found non-business tax revenues that had been on a pace to fall $48 million short in the current fiscal year are now tracking $91 million behind budget. Arlinghaus cautioned that business taxes are currently slightly ahead of budget but are expected to slow a little in the March quarterly collections. "More than a third of all business taxes are collected in March and April. Those collections will have a significant impact on how bad the situation gets."
Any shortfall in FY2008 will create a lower base for 2009 and be compounded by the recession. Adding the recent deterioration to the January estimates of department heads, the revenue shortfall for the biennial budget will be between $205 and $258 million. A strong economic turnaround before the end of the year would improve the outlook while a recession would make the numbers even worse.
The study, "State Revenue Deteriorating," is available at www.jbartlett.org.