State budget shortfall grows by $75 million

At the end of October, news reports said the state Council on Revenues' latest economic forecast indicates the state faces an additional $75 million budget shortfall for the current fiscal year. The $75 million shortfall is on top of a $155 million deficit the council forecast just two months ago.

"We are currently in the process of reviewing plans by each department to reduce their discretionary spending further by 10, 15 and 20 percent, and we will be reaching out to the groups that could be impacted by these reductions to get their input," Lingle said Oct. 29 in a written statement. Many programs provided to the state by nonprofits under contract fall into the discretionary spending category.

Lingle already had imposed a 4 percent restriction on nonessential state spending and said her administration is looking at all departments to find more areas to trim. In addition to fiscal 2009 cuts the administration had projected a budget deficit approaching $900 million by June 2010 if more cuts were not made.

The Council on Revenues' forecasts for the 2009 fiscal year predicted year-over-year growth in revenues of 4.1 percent in March. Since then, the council revised its estimates downward -- to 2 percent growth in May and 1 percent in July -- before predicting a 0.5 percent decline in revenue in October. One percent represents approximately $50 million.