By Jakob Thorington | State Affairs
Legislative budget advisers have cut state budget projections by $200 million due to the U.S. conflict with Iran and its effect on gas prices and consumer behavior.
Joint Legislative Budget Committee staff delivered the updated revenue forecast Thursday to the Finance Advisory Committee as the legislative session approaches its 100th day.
In January, budget committee staff projected $577 million available for the budget. That has now dropped to $378 million with the staff’s revised April forecast. JLBC Director Richard Stavneak said the revised projection does not account for tax conformity nor any of the one-time spending items that are expected in the budget.
The lower projection was mostly attributed to the continuation of the Iran conflict, said JLBC Deputy Director Jack Brown. He said if the conflict is resolved, the likelihood of the January forecast projection would be greater.
“A continuation of the Iran conflict would suggest a more pessimistic revenue forecast. This could even be something below the April projections and that’s because there’d be longer-term disruptions to oil markets under this scenario and there also could potentially be changes in consumer behavior,” Brown said.
