Legislative Finance Committee

Recurring revenues through March of the FY17, which ends June 30, were running about $97 million ahead of the December estimate. March recurring revenues were $516.1 million, up $62.5 million, or 13.8 percent, from a year ago. Year-to-date recurring revenues were down $72.1 million, or 1.8 percent, from last year.

More than $855 million for 2,297 in capital outlay projects was outstanding as of the end of March 2017, with more than $420 million of that for projects authorized before 2016. Sixteen projects totaling more than $24 million appropriated before 2016 are on hold because of a January executive order freezing inactive projects.

The Legislature during the 2017 session eschewed the usual, relatively leisurely start of 60-day session for a mad dash through a solvency package to ensure FY17 ended in the black. For FY18, faced with continuing to cut, the Legislature instead settled on a state plan that left spending flat but relied on new revenue. Nevertheless, the governor's vetoes of the revenue bill and significant parts of the General Appropriation Act mean the FY18 budget is far from resolved. The governor has said she will call a special session, the state Supreme Court will hear arguments in mid-May on the Legislature's legal challenge of the governor's vetoes, and the legislative leadership has launched an effort to call itself into extraordinary session.

State revenues are on track with the forecast for this year, with assurances from the federal government a delayed mineral leasing payment will come in before the end of the fiscal year. February revenues were up from 6 percent from the same month a year ago, but down almost 4 percent for the fiscal year to date.

LFC analysis shows HB412 would raise about $512 million from eliminating tax expenditures and would spend between $260 million to $490 million to reduce gross receipts pyramiding, primarily in the fields of construction, IT, attorneys, accountants, and architects. This might leave little money left to reduce rates for people newly brought into the tax, including hospitals, doctors, and nonprofit organizations. An alternative would be to use all the money to reduce the rate, reducing the effect of pyramiding and reducing the impact on those losing their deductions.