RI tax revenue forecast cut by $5 million

RI State House May 2016_304270

PROVIDENCE, R.I. (WPRI) – State revenue will be slightly lower this budget year than originally projected, but it will grow at a healthy clip next year, according to a new forecast.

The number-crunchers who took part in the state’s semiannual Revenue Estimating Conference announced Friday that they expect state revenue to be $5.4 million lower in the current 2018-19 budget year than they projected in May, the last time they met.

A key culprit: the delayed launch of sports betting, which was authorized by the Assembly last spring following a U.S. Supreme Court decision that allowed the move. Lawmakers banked on $23.5 million in revenue from sports betting for this budget year, but the new estimate cuts that to $11.5 million. Growth in other revenue sources, such as the sales tax and slot machines, offset some of the loss.

The governor and lawmakers are required to use the Revenue Estimating Conference’s forecasts when they put together the annual state budget. The November estimates are used to create the governor’s initial proposal, expected in January, and then those numbers are updated in May so lawmakers can use the revised figures to finish the final version, usually completed in June.

The new estimates show state revenue is still projected to increase this budget year versus last year, from $3.91 billion in 2017-18 to $3.99 billion in 2018-19. From there it’s expected to rise by another $138 million in the 2019-20 budget year, to $4.13 billion. (Budget years run from July 1 to June 30.)

The House Fiscal Office’s most recent estimate said the governor would need to close a deficit of $158 million in her upcoming budget proposal. It’s unclear how much the revised revenue figures will change that number.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook

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