State revenues improve, but still lag projections

AUGUSTA — Legislative budget-writers who continue to see lower-than-predicted monthly state revenues voted Thursday to accept more than $9 million in savings offered by State Treasurer David Lemoine.

The savings were achieved through negotiating lower interest rates on 10-year state bonds, Lemoine told lawmakers Wednesday.

They are looking to fill a $30 million hole from the previous budget by finding ongoing or "structural" savings, rather than one-time gimmicks.

The Appropriations Committee was eager to book the savings presented to them by Lemoine on Wednesday, but there were questions about whether it will count as ongoing savings.

Even if legislators determine the money can't be used as structural savings, they can still use it to help balance the current budget as revenues continue to slump.

General Fund revenues for August came in $3.4 million less than projected; July revenue was about $11 million short.

"We're $14 million down through two months, about $39 million down overall," said Ryan Low, commissioner of the Department of Administrative and Financial Services.

Low said the calculation included $25 million that was borrowed from this year's budget to help balance the 2009 fiscal budget, which is in addition to the $30 million lawmakers also need to find.

"The one thing we've seen over the last couple of months, in July and again what we saw this month, is that it looks like (revenues) have started to stabilize a little bit," Low said, noting that May and June revenues came in $25 million to $30 million under budget.

"Even more important is that we've seen some (revenue) lines are up and some lines are down, which is a lot different than what we were seeing back in May and June, when everything was down," he said.

Low said the federal "cash for clunkers" program, which provided a large rebate for new, fuel-efficient car purchases, had a positive, one-time impact on state sales revenue.

"It certainly propped up the sales-tax line," he said. "What we don't know is how many people were going to buy cars in September and October and November and we just saw (those sales) pulled forward."

Low said there's more stimulus money heading into the state's economy through various departments and programs, but he didn't expect anything to have as noticeable an impact as the "cash for clunkers" program.

The Appropriations Committee is scheduled to meet again on Oct. 7.

rmetzler@sunjournal.com