Sunday, January 5, 2003

State takes in less and spends less

The Associated Press

COLUMBUS - The state took in less than it expected in the first six months of the fiscal year, but it also spent less than anticipated.

State government revenues for the six months that ended Dec. 31 trailed estimates by about $152 million, or 1.5 percent, but spending was $150 million below projections, said state Budget Director Thomas Johnson.

Figures released Friday by the state Office of Budget and Management showed that for the month of December, tax collections trailed estimates by $82.5 million, or 6.6 percent.

The December figure was viewed as critical by Gov. Bob Taft. He had said there may be additional budget cuts this year if revenue from the holiday buying season fell short.

For the six-month period, tax receipts were $65.8 million, or 0.9 percent, lower than predictions. When nontax revenues such as earnings on investments and federal grants are taken into account, the total income fell an additional $86 million below expectations.

However, motor vehicle sales tax collections exceeded estimates for the first six months of the fiscal year by $35.5 million, or 7.9 percent.

Additional cuts before the fiscal year ends on June 30 would hurt state programs and reduce the base of the proposed 2004-'05 budget, which will be under consideration in the Legislature after Mr. Taft presents it Feb. 3.

Because of the sluggish economy and the borrowing, savings and other one-time money used to balance the current budget, it has been estimated that it will take an additional $3.5 billion to $4 billion just to extend existing programs for two years.

Income estimates were lowered from earlier projections seven months ago when a second budget-balancing bill was enacted.

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