State revenue forecast comes in lower than expected

State lawmakers will have about $213 million less to spend during the next two years than they thought they would when they started working on the next two-year budget.

That’s a drop of less than 1 percent each year, according to a revenue forecast the State Budget Committee received Thursday morning.

So the impact on what’s now a $31.5 billion proposed budget won’t be huge. But it will force lawmakers either to cut their proposed spending or dip into the state’s $2 billion cash reserves for spending through June 30, 2017.

Senate Appropriations Chairman Luke Kenley, R-Noblesville, has said he expects to spend the next two weeks working to trim the spending proposed by the House and Senate earlier this session. Lawmakers have until midnight April 29 to finish the budget or face a special session to do it.

Gov. Mike Pence issued a statement saying the revenue forecast shows his caution about spending has been “well-founded.”

“Despite this forecast, Hoosiers deserve to know that our state continues to enjoy a strong fiscal reputation as evidenced by this week's renewal of our AAA bond rating,” Pence said. “I am confident, with continued fiscal discipline, we will enact another balanced budget that funds our priorities, beginning with much needed resources in education.”

The forecast shows that state revenues in the current fiscal year will miss a December forecast by about $105 million. That reduces the base on which future growth is based.

The new forecast shows the state will take in about $30.5 billion during the next two-year budget cycle, which starts July 1.