PA 09-214—SB 1162 (VETOED) (OVERRULED)

Appropriations Committee

Finance, Revenue and Bonding Committee

Government Administration and Elections Committee

AN ACT REQUIRING CONSENSUS REVENUE ESTIMATES

SUMMARY: This act requires the Office of Policy and Management (OPM) secretary and the Office of Fiscal Analysis (OFA) director to agree on and issue consensus revenue estimates each year by October 15 and to issue any necessary consensus revisions of those estimates in January and April. The estimates must cover the current biennium and the three following years. If the secretary and the director cannot issue a consensus estimate, they must issue separate ones. In such a case, the comptroller must issue the consensus estimate based on the separate estimates. The comptroller's estimate must equal one of the separate estimates or fall between the two.

The act also establishes an additional procedure for developing a consensus revenue estimate for the FY 10-11 biennium and requires the governor and legislative fiscal committees to take certain actions based on those estimates if no budget for those years has become law by the act's effective date.

Under the act, the consensus revenue estimates and revised estimates must (1) be the basis for the governor's proposed budget and the revenue statement included in the budget act the legislature passes and (2) be included in the annual fiscal accountability reports submitted to the legislature's fiscal committees each November. If the estimates or revised estimates lead to forecasted deficits or increased deficits exceeding certain levels, the act requires the governor and the legislature's fiscal committees to take specified actions to address the estimates.

EFFECTIVE DATE: Upon passage

ANNUAL CONSENSUS REVENUE ESTIMATES

Process and Timetable for Developing Consensus Revenue Estimates

The act requires the OPM secretary and the OFA director to agree on and issue consensus revenue estimates each year by October 15. The estimates must cover a five-year period that includes the current biennium and the three following fiscal years. It also requires the two offices, by January 15 and April 30 each year, to issue either (1) a consensus revision of their previous estimate or (2) a statement that no revision is needed.

If the secretary and the director do not issue a consensus estimate or revision by these deadlines, they must issue separate estimates or revisions. The state comptroller must then issue a consensus estimate or revision based on the separate estimates. The comptroller must either (1) adopt one of the separate estimates or revisions or (2) issue an estimate that falls between the two. The deadline for the comptroller to issue the October consensus estimate, if required, is October 25. For any required revised January and April consensus estimates, the comptroller's deadline is no later than five days after OFA and OPM fail to issue a consensus revision, i. e. , by January 20 and May 5, respectively.

Requirements for Using Consensus Estimates

The act requires the governor to base the draft revenue and appropriations bills needed to carry out her budget recommendations on the consensus estimate or most recent revised consensus estimate. It also requires the consensus estimate or revised consensus estimate to serve as the basis for the estimated revenue statement for each fiscal year that, under existing law, the legislature must include in the state budget act. By law, this statement must be itemized by major revenue source for each major state fund and show that the budget's spending requirements and the state's estimated revenues are balanced in each fiscal year.

Finally, the act requires OPM and OFA to include the October consensus revenue estimate in the state fiscal accountability reports they must each submit annually to the Finance, Revenue and Bonding and Appropriations committees by November 15.

Revised Consensus Estimates Forecasting Deficits or Increased Deficits

When the revised consensus revenue estimate issued in January or April of any year changes the previous consensus estimate to forecast a deficit or deficit increase greater than 1% of total General Fund appropriations for the current year, the act requires the governor and the General Assembly to address the revised estimates if (1) the General Assembly is in session and (2) no budget for the upcoming fiscal year has been adopted. (Since revenue projections alone cannot forecast a deficit, presumably the existence and size of any deficit forecast under the act would be determined by comparing the consensus revenue estimate to state spending projections. )

If the January or April revised estimate forecasts such a deficit or deficit increase, the governor must submit a budget document to the legislature within 25 calendar days after the January estimate is issued or within 10 calendar days after issuance of the April revised estimate. The document must be based on the consensus or revised consensus revenue estimate and must include drafts of appropriations and revenue bills necessary to address the most recent of these estimates.

If the April revised estimate forecasts such a deficit or deficit increase, the Appropriations and Finance, Revenue and Bonding committees must, by the 10^th business day after the April consensus revision is issued, prepare and vote on adjusted appropriations and revenue plans needed to address the revised estimate.

ADDITIONAL REQUIREMENTS FOR FY 10-11 BIENNIUM

If no budget for the July 1, 2009 to June 30, 2011 biennium has become law by the act's effective date, the act gives the secretary and the director five days after its passage to issue the revised consensus revenue estimate for that biennium. If the offices do not issue the estimate by the deadline, they must issue separate revised estimates. Immediately afterwards, the comptroller must consider the two estimates and issue the revised consensus estimate for the FY 10-11 biennium. The estimate must be the same as OFA's or OPM's revised estimate or fall between the two.

Unless a budget for the July 1, 2009 to June 30, 2011 biennium has become law by the act's effective date, the Appropriations and Finance, Revenue and Bonding committees must, by the 10^th day after that date, prepare and vote on adjusted appropriations and revenue plans needed to address the revised consensus estimate. Also by the 10^th day after the act takes effect, the governor must submit a budget document to the legislature that addresses the revised consensus estimate. The document must be based on the revised estimate and include drafts of appropriations and revenue bills necessary to address it.

OLR Tracking: JSL: KM: PF: ts