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Economic Forecast Will Lay Groundwork For New State Budget

Chris Potter

The General Assembly‘s fiscal analysts release their updated economic forecast next week, kicking off the four-month process of crafting a new state budget.

Governor Pence and fiscal leaders in the House and Senate have said they intend to propose increased school funding for the next two years, but they‘ll rely on next week‘s forecast to fill in the specific dollar amounts for schools and the rest of state government.

Office of Management and Budget director Chris Atkins says tax collections the last few months have been higher than at the same time the previous year, but not as much as forecasters expected when the current budget was written.

"We do need some small revenue growth just to maintain the programs and the spending levels that we have," says Atkins. "So, at least our view is that anything above very small revenue growth will allow us to do some new things."

Senate Appropriations Chairman Luke Kenley says legislators can always reopen the budget in 2016 if tax collections are consistently outstripping budget targets.

After years of belt-tightening, Kenley says, multiple agencies and interest groups have reacted to signs of economic improvement with a flood requests for more money.

Fiscal analysts will update their forecast again in April, about two weeks before the legislature adjourns. The final budget will be based on those numbers.

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