PROVIDENCE – The state will collect $119.66 million more than expected in revenue this fiscal year and in fiscal 2012, state advisers forecast Monday – a bit of much-needed good news as officials craft a 2011-2012 state budget that must close a gaping projected shortfall next year.
Factoring in other adjustments – such as a heavier cash-assistance caseload and increased medical-assistance expenditures in fiscal 2011 and a bigger transfer to the rainy day fund in 2012 – advisers said the state should have $113.3 million more than expected to use as officials see fit over the two years.
They need the money. State leaders are grappling over how to close what was previously projected to be a $331 million deficit for fiscal 2012.
Part of Gov. Lincoln D. Chafee $7.66 billion state budget plan to deal with the shortfall is to lower the state sales tax while expanding it to goods and services that have not been taxed before. Chafee’s proposal also would create a two-tier sales tax system.
The Chafee administration has said the changes would raise an additional $164.88 million in tax revenues, but the idea has proved to be unpopular, particularly in the business community.
The General Assembly leadership has declared Chafee’s proposal “unacceptable,” although House Speaker Gordon Fox hasn’t ruled out some sales tax alterations.
Chafee’s budget proposal is in the hands of the House Finance Committee, and it wasn’t immediately clear how the rosier fiscal picture would affect budget deliberations.
The participants in the semiannual Revenue Estimating Conference, which ended Monday, concluded that with the economy in recovery mode, the state would collect $53.78 million more than initially estimated in the current fiscal year, which ends June 30.
With an additional $1.34 million transfer to the state’s rainy day fund, $4.77 million in additional cash-assistance caseload and medical-assistance expenditures and $2.37 million in additional items in Chafee’s midyear budget changes, the state has $45.31 million in new “resources” for fiscal 2011, advisers said.
For fiscal 2012, revenue collections would run $65.89 million ahead of estimates, and a lighter social-assistance caseload would lead to a $3.96 million surplus.
After subtracting an additional $1.84 million transfer to the rainy day fund, advisers concluded the state would have $68 million in new “resources” for fiscal 2012.
