State Economic Outlook Less Than Expected

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(STATEHOUSE) - Legislative budgeters are shrugging off a slightly more pessimistic economic forecast for the next two years.

The latest forecast sees Indiana collecting 150-million dollars less in taxes and other revenue sources than expected. Governor Daniels issued a written statement saying he won't accept a budget which increases spending more than about half-a-billion dollars a year.

That's slightly less than Daniels proposed when the forecast was rosier, but Senate Appropriations Chairman Robert Meeks says it's about what the Senate budget already calls for. He says the shortfall will come out of the 1.2-billion-dollar surplus he'd penciled in.

Fiscal analysts generally recommend a reserve of 7 to 15-percent of revenues. Meeks' budget would have put the state at 8.5 percent--lopping off the forecast shortfall cuts that to 7.4 percent. The House version of the budget left a surplus around five-percent.

House Budget Chairman William Cochran agrees the 150-million will come out of the reserve figure, not the Senate's proposed spending. Cochran says he's not surprised at the forecast. He says the April projection is almost always gloomier than the December one.

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