Revenue Report Expected to Show $20 Million Deficit
(Host) The Dean administration is expected to release a new revenue report by the end of this week and it's likely that the report will show that the state will have roughly a $20 million deficit with one month remaining in the current fiscal year. Administration Secretary Kathy Hoyt says money from the state's rainy day funds will be used to cover the shortage.
The drop means that revenue projections for the fiscal year that begins on July first are too high. Rather than try to make additional cuts to the proposed budget for next year, the administration and legislative leaders have agreed to give the governor greater power to rescind part of the budget this summer.
Last year, Dean was only allowed to reduce spending by 1% in any department of state government. Hoyt says the new expanded authority will allow the governor to have much greater flexibility in making budget cuts:
(Hoyt) "The way I view this rescission language is that we are being encouraged to look at ways to minimize the negative effects and to find ways to suggest plans to the Legislature for making reductions. This language gives us a lot more leeway to do that than last year's language."
(Host) It's likely that Dean will present a plan to reduce the budget at a meeting of the Joint Fiscal Committee in the middle of July. Any plan proposed by the governor must be approved by the committee before it can implemented.