Martin Warns About Rosy Projections
Coverage of a committee hearing at the "Off the Marble" blog run by Rep. Mark Martin had another interesting tidbit or two. As is my habit, I edit the dry stuff and give you only the jewels that popped out at me....
"9:55 am – Richard Wiess presented the revenue forecast. AMAZING! Guess what, they predict we will have a 2.0 percent growth rate next fiscal year. Here is the forecast: Exhibit D.3 – DFA Official Revenue Forecast. I wonder who seriously believes that we should create our next budget based upon such a rosy forecast? The importance of this is big. The spending created in the upcoming budget session will be based upon this forecast. If the forecast predicts additional revenues, the budget will have increased spending. There is nothing conservative about this budget forecast."
Sounds like they are setting the stage for an "unforeseen emergency" tax hike.
They also reported that our unemployment trust fund is over $200 million dollars in debt to the federal government. Questions on whether this was a violation of the Arkansas Constitution were not addressed. We are supposed to have a surplus cushion in this fund, a cushion which was never generated. Here is an exchange on that....
"9:44 am – I asked where the errors to caused this situation in the first place, and even if we increased the unemployment taxes and begin to create the solvency reserve recommended of $700 million to $1 billion, what activity is in place to prevent the trust from being raided again by increasing unemployment benefits. I asked what went wrong, was the trust fund mismanaged by the legislature or due to recommendations by the department.
9:45 am – He tried to redirect to the point that we did not expect this economic downturn. I countered that by his own words that even before the economic downturn he knew that the $700 million to $1 billion was the balance required for solvency, but the trust had never been above about $225 million. Clearly this mismanagement by the department or the legislature created the current situtation. I was cut off by the chairman."
"9:55 am – Richard Wiess presented the revenue forecast. AMAZING! Guess what, they predict we will have a 2.0 percent growth rate next fiscal year. Here is the forecast: Exhibit D.3 – DFA Official Revenue Forecast. I wonder who seriously believes that we should create our next budget based upon such a rosy forecast? The importance of this is big. The spending created in the upcoming budget session will be based upon this forecast. If the forecast predicts additional revenues, the budget will have increased spending. There is nothing conservative about this budget forecast."
Sounds like they are setting the stage for an "unforeseen emergency" tax hike.
They also reported that our unemployment trust fund is over $200 million dollars in debt to the federal government. Questions on whether this was a violation of the Arkansas Constitution were not addressed. We are supposed to have a surplus cushion in this fund, a cushion which was never generated. Here is an exchange on that....
"9:44 am – I asked where the errors to caused this situation in the first place, and even if we increased the unemployment taxes and begin to create the solvency reserve recommended of $700 million to $1 billion, what activity is in place to prevent the trust from being raided again by increasing unemployment benefits. I asked what went wrong, was the trust fund mismanaged by the legislature or due to recommendations by the department.
9:45 am – He tried to redirect to the point that we did not expect this economic downturn. I countered that by his own words that even before the economic downturn he knew that the $700 million to $1 billion was the balance required for solvency, but the trust had never been above about $225 million. Clearly this mismanagement by the department or the legislature created the current situtation. I was cut off by the chairman."
posted by Mark Moore (Moderator) at Monday, December 21, 2009
3 Comments:
First link should be: http://www.offthemarble.com/2009/12/18/arkansas-legislative-council-december-18-2009/
It apparently got accidentally linked to the poster plastered outhouse story.
I hate it when that happens.
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