Lawmakers eyeing state’s cash reserve as budget hole grows to $200 million

After four months of tax receipts coming in short of expectations, the state budget is once again in the red, short by more than $200 million for this year alone. The next biennium is already $840 million to the negative.

Fiscal officer Keisha Patent told the Tax Rate Review Committee on Wednesday that the state’s actual receipts to the general fund, the most significant factor to the changes in the budget, is over $228 million less than what was expected. After accounting adjustments, the deficit is now $208,556,477 for this year.

“It is going to continue to be a time of belt tightening,” said Sen. Robert Clements, who chaired the appropriations committee. “There’s going to be some adjustments needed. We still have adequate cash reserve, so I do not support a special session at this time.”

Clements was referring to a special session of the Legislature that could potentially be called to address the budget deficit. But Gov. Jim Pillen is not currently planning on calling a special session.

After appropriations from the past legislative session, the state will have more than $526 million in its cash reserve fund. Clements pointed out that those funds could cover this year’s deficit and lawmakers will be able to handle future deficits in January during the regular session.

“I believe they'll have a tough time again with the shortfall we're looking at now,” Clements said. “But I believe we've been through this before, and they will be able to solve it.”

Pillen also recently asked state departments to cut their budgets by 5%. While Clements doubted that all of them would be able to, if they did all cut their budgets, he said the savings would be around $250 million, which would more than cover this year’s deficit.