State Comptroller Kevin Lembo is reporting a $192.3 million deficit for the fiscal year that ended June 30, despite a biennial budget that included across-the-board tax increases totaling $1.5 billion per year.
As disappointing as that may sound, its important to put those numbers in perspective. When that biennial budget was adopted last year, the state was facing a $3.6 billion shortfall. From a fiscal perspective, we are in far better shape today then we were then.
Still, there is reason for disappointment. The shortfall from this last fiscal year will be covered with funds that had previously been set aside to pay down not pay off borrowing from 2009 that was needed to balance the budget at that time.
In other words, were still paying the price for the poor fiscal decisions of the past, without yet curbing our appetite for spending.
Republican lawmakers have described the budget balancing plan as a gimmick. They are not wrong. To resolve the shortfall, were reverting to the practice of taking from Peter to pay Paul.
In his report to the governor, Lembo notes quite clearly that income tax revenues fell short of projections, meaning that were still living beyond our means in this case, $192.3 million above what we should be spending.
Massive tax increase
And that, in our opinion, is a generous assessment of the states fiscal footing. The only reason were as well off financially as we are is because of that massive increase in taxes.
We appreciate the fine line that is drawn when preparing budgets, using the best available information to try to project how much revenue will be collected during the course of a year, and how much spending is possible based on those estimates and hope that there are few unanticipated cost overruns.
We need to do better, however.
Weve made great strides in moving our fiscal policy in the right direction.
But we havent yet gone far enough on the spending side of the ledger.
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