State lawmakers have $550 million more in recurring and non-recurring money to appropriate in next year’s budget, providing more money to address state spending priorities in the next fiscal year’s budget left out in a recently adopted House budget plan.
The new estimates come as the state recovers from the ongoing COVID-19 pandemic.
Last month, the House passed a $9.8 billion state spending plan for the next fiscal year with the lower revenue estimates. That plan did not fund many state agency requests.
However, House budget writers have said they expect to revisit the budget plan in May and June with new revenue estimates. Senate Finance Committee members are now crafting their own the spending plan, for the next fiscal year, which starts on July 1.
Additional recurring money may be used for long sought after raises in state employee pay.
COVID-19 related restrictions slowed the economy and increased unemployment. However, as restrictions on activity were lifted, the economy improved, revenues began to bounce back and the unemployment rate dropped.
The economy also has been propped up by federal COVID relief bills, which included direct stimulus payments.
“We’ve had so much stimulus money spent this year, which we don’t expect to be recurring next year,” said Frank Rainwater, the executive director for the Revenue and Fiscal Affairs Office.
Legislative budget writers will have about $385.8 million of new recurring money, up from $182.8 million the Board of Economic Advisors last estimated. A projected surplus, $646 million the state had available but did not spend for the current fiscal year, will give lawmakers up to $1.3 billion of one-time money available to be appropriated during the 2021-22 fiscal year.
In total, lawmakers have an additional $1.7 billion available to spend that they didn’t in the budget year that ends June 30.
The higher revenue estimates come as sales tax revenue between January and March exceeded previous BEA estimates.
The higher amount of recurring dollars is still less than the more than $800 million forecasters had predicted would be available before the COVID-19 pandemic wreaked havoc on the economy and state revenues. Because of the revenue drop, lawmakers last year did not adopt a formal spending plan for the 2020-21 fiscal year and instead kept spending levels the same as 2019-20.