When this year’s state budget was first enacted back in April, the budget gap for fiscal 2010-11 was projected at $2.17 billion.  The First Quarterly Financial Plan Update in July more than doubled this estimate, to $4.62 billion.   And today’s Mid-Year Update says next year’s gap has grown by another 47 percent—to $6.8 billion.

The governor’s proposed Deficit Reduction Plan (DRP) for the current fiscal year would yield only $434 million in recurring savings, today’s report indicates.  Thus, under the best-case scenario, the state’s budget hole for the year starting next April 1 will be at least $6.36 billion, or more than three times larger than projected when this year’s budget was adopted.

The “out years” of the financial plan are also uglier, with the 2011-12 and 2012-13 gaps each growing by about $1 billion—to $14.8 billion and $19.25 billion respectively—assuming no DRP is enacted this year.   If the governor’s current deficit-closing plan is accepted, those gaps won’t be much different: $14.32 billion in 2011-12 and $19.06 billion in 2012-13.

Sooner or later, the Governor and the Legislature have to get around to making some actual spending reductions.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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