In a press release Tuesday afternoon, Governor Brad Henry, Speaker Chris Benge and Senate Pro-Tem Glenn Coffee announced agreement on how to address the shortfalls in the FY ’10 budget that have resulted from this year’s revenues coming in sharply below the certified estimate.

Based on the revised estimates for FY ’10 certified by the Board of Equalization in December, the state is looking at a total mid-year shortfall of $809 million in FY ’10, made up of  $729 million in the General Revenue Fund and $80 million in the HB 1017 Education Reform Fund. The leadership agreement involves the following main features for bringing the FY ’10 budget into balance: Read the rest of this entry »

The February revenue numbers are in and they are not good. The Treasurer’s office reported Tuesday that general revenue came in a whopping $103.9 million, or 30.4 percent below the certified estimate for February. In January, collections missed the estimate by $50.8 million. Collections for each major tax (individual income tax, corporate income tax, sales, gross production, and motor vehicle) came in below the monthly estimate and below collections for February 2008.

In two months, most of the surplus that had built up over the first six months of FY ’09 has vanished, although collections through February still remain $47.3 million, or 1.3 percent, above the certified estimate. With four months remaining in the fiscal year, the hope now becomes that revenue collections do not plummet below the amount appropriated in the current year budget. Because of the law restricting appropriations to 95 percent of the certified estimate, there is a $297 million cushion built into the budget before the state would face a current year revenue shortfall. Suddenly, that cushion is starting to look mighty soft.