2009 Revenues through the First Three Quarters
Despite the dire predictions, in March we learned that general fund revenues through the first nine months of 2009 were even with 2008 levels. Revenues had been running ahead of 2008 from July through December despite the weak economy and the financial crash, followed by a weak January and the month of February being the first in which shortfall predictions were met. March revenues came in even so that the result of the first three quarters was even revenues versus 2008.
| 2009 Revenue Predictions | |||
| 2008 Actual | 2009 Budget | 2009 CFG Shortfall | 2009 Current Pace |
| $8,664 | $8,824 | $8,430 | $8,664 |
| Shortfall | -$394 | -$160 | |
| (in millions) | |||
Through nine months, revenues are on pace to match 2008, leaving a shortfall of about $160 million instead of the $406 million suggested in November.
As we noted in the previous post, the budget cuts Beshear proposed in December combined with the predicted new revenue from tax increases in the session provided him with $199 million in new budget room. With a $160 million shortfall, Beshear still has $36 million in surplus budget space for FY 2009, without the need for the additional flexibility the legislature provided.
If we learn that this breathing room does not materialize, then we will know that the Governor has spent above the baseline provided in the 2008 budget.
Today, we are likely to learn that April revenues came in considerably short of expectations. We have noted that
April and May receipts were incredibly volatile, with April 2008 receipts increasing 36% over April 2007, but a 21% decrease in May receipts versus 2007. With such a spike last April, receipts are almost determined to be down this April, just as they are almost determined to be up in May.
So let's take any predictions based on the single month of April instead of the trend from the previous nine months (remember that the financial crash happened in October) with a grain of salt.
