$1 billion in savings still possible

Despite a projected $423 million drop in revenue, the state is still in a good position to save $1 billion if lawmakers can exercise restraint in the 2008 supplemental budget and offset any new spending with reductions in lower priorities (Priorities of Government budgeting 101).

As we previously noted, the state is not facing a revenue problem but a spending problem.

We further increase spending at our own risk. Today's revenue forecast projects $31,918 million in revenue for 2009-11 while the January 2008 budget outlook estimates $34,134 million in spending: a $2.2 billion structural deficit.