Budget Stalemate, Declining Revenues Pose Serious Risks

MTF warns that the state could face a $900 million revenue shortfall in 2002 if the trend of declining revenues in the first two months of the fiscal year continues. At the same time, not only is legislative approval of the fiscal 2002 budget woefully overdue, both the House and Senate version of this year's spending plan are out of balance even before factoring in the latest bad revenue news. Meanwhile, lawmakers have not taken the actions needed to close out fiscal 2001, leaving the use of a surplus of more than $500 million in limbo and jeopardizing the state's ability to meet key financial reporting deadlines.