In late July, Gov. Brad Little issued a press release with the following opening sentence: “Good government starts with living within our means.” We could not agree more. The press release went on to state:
“Going forward, our approach will remain exactly the same. We will continue to budget conservatively. We will continue to distinguish between one-time cash and ongoing revenue. We will continue to make decisions based on long-term sustainability, and we will continue to hold the line on spending more than we have.”
Let’s make sure we put a pin in this statement. The reason may surprise you. Our state tax collections exceeded projections in the prior fiscal year. We bring up the Governor’s “hold the line” quote precisely because revenues are now forecast to exceed the session forecast for Fiscal Year 2027 (FY27). The recently revised forecast projects even stronger revenue growth in the current year, FY27. Take a look at the table below.
If you look at the circles on the data highlighted at the bottom of the document they demonstrate the ending cash balance for the current fiscal year is projected to be $619.5 million, which is $470.7 million more than the projection at the end of the session five months ago.
All this data and recent budgeting history highlight why it is important to put out the message to, “hold the line" - because agencies, politicians, and bureaucrats like to spend money. Spending restraint is necessary because lower spending growth leads to lower taxation. Families and businesses are hurting, and government should be focusing on restraint mixed with a healthy portion of dropping the property tax or reducing income taxes.
Higher than projected revenues are a sign of economic growth, but they can unleash the big spenders too. This is important messaging right now because agency budget requests are out this month for the upcoming fiscal year, and the governor will reveal his budget request in January. The extra funds should not be seen as a windfall for state agencies but as extra payments to be returned to the taxpayers from whom the dollars originated.
Now is indeed the time to “hold the line.” Thank you, Governor Little.
