State Treasurer Scott Meacham gave hope to anxious state agencies and employees when he announced Thursday that there was no need to cut agency budgets for the current year.
Senate Budget subcommittees have requested that agency directors submit reports on how they would deal with a 1 percent reduction in their budgets for the current fiscal year.
Meacham indicated the state still has around $250 million dollars in the form of a constitutionally mandated cushion that he expects will be sufficient to make it through the current fiscal year.
“It is certainly an indication that a better fiscal report for March-April tax collections is likely,” said OPEA Executive Director Sterling Zearley. “We are still concerned that state agencies are operating very close to the margin, leaving much needed positions vacant because of the revenue picture. We are continuing to keep a close eye on any new developments.”
The state revenue dropped by 8.5 percent in last month’s revenue report which indicated the possibility of a revenue failure. A revenue failure occurs when the state runs out of cash reserves and does not collect enough money in a month to cover agency allocations.
“At the point a revenue failure is declared,” said Zearley. “Agencies would have to cut budgets similar to what transpired in 2003.”
OPEA will continue to monitor the revenue picture and keep you informed.
