The General Assembly's chief fiscal expert today said that the balanced budget Gov. Harry Hughes released last week may be out of balance and facing a deficit even before the legislature has time to vote on it.
William S. Ratchford II, director of the legislature's Department of Fiscal Services, told the two committees that are responsible for evaluating Hughes' fiscal 1984 budget, that the revenue estimates used to balance the budget may be overly optimistic. By law, the governor is required to submit a balanced budget to the legislature.
Ratchford said that Hughes is basing his $6.4 billion budget on revenue figures that show a growth next year of nearly 11 percent in income tax collections and of more than 8 percent in sales tax collections. The income tax and sales tax are the two largest sources of state revenues.
But, according to Ratchford, current projections by the Board of Revenue Estimates show both taxes are coming in well below estimates, and only a fairly sizable recovery in the near future would bring in adequate amounts of money.
"The revenues are contingent on an upturn in the economy," Ratchford told members of the House Appropriations Committee and the Senate Budget and Tax Committee in separate hearings. "If you begin to have a recovery--I don't mean a booming economy--the estimates will hold. If that doesn't happen you may be coming into the 1984 session and looking at a deficit for the year in which you are functioning (1984)."
In formulating next year's (fiscal 1984) budget, Hughes used December estimates, which projected a $133 million shortfall in fiscal 1984. The revenue board, composed of Hughes, Comptroller Louis L. Goldstein and Treasurer William S. James, is to meet during the first week in March to revise the December estimates.