Nov. 19, 2008 at 12:23pm

State revenue forecast continues to fall

Economic conditions in both the nation and the state have deteriorated sharply since the last Revenue Forecast in September, according to the state Economic and Revenue Forecast Council.

"The credit crunch has knocked the wind out of an already weakening national economy," an economic forecast released today stated. "Consumer and business spending have stalled as access to credit has been choked off, and confidence has worsened."

The forecast assumes the U.S. economy will be in a recession that will last two more quarters, with the current quarter being the weakest. That could mean better times for the national economy beginning in mid 2009.
 
"The downturn will be more muted – both in duration and depth - in our state, than for the nation, as a result of our aerospace and software publishing industries," the report continued. "However, unlike in the previous downturn in 2001, we expect a sharp decline in consumer spending this time, so the impact on state revenues will be more severe."
 
The November 2008 forecast for the next biennium is $28.6 billion, which is $500 million lower than expected in the September forecast. That translates to a current budget shortfall of $5 billion.

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