Office of Planning & Budgeting

June 24, 2021

June Revenue Forecast Shows Strong and Growing State Economy


The June revenue forecast again builds on the promising economic recovery we have seen in recent months. As a reminder, the June 2020 Revenue Forecast, released by the Economic and Revenue Forecast Council (ERFC), forecasted a precipitous economic decline as a result of the full shutdown in spring and early summer. While the September Revenue Forecast and the November Revenue Forecast demonstrated significant recovery from June estimates, deficits remained. Fortunately, both the March 2021 forecast and today’s June Revenue Forecast have shown a full recovery and signs of promising growth into the future.

More background on state revenue forecasts is available here.

The General Fund – State (GF-S) revenue forecast has been increased by $807.6 million in the current 2019-21 biennium and $1.239 billion in the upcoming 2021-23 biennium. Forecasted GF-S revenue is now $50.848 billion for the current biennium, $55.611 billion for the 2021-23 biennium and $58.979 billion for the 2023-25 biennium. Revenue increases are due to increased taxable economic activity in the state, especially in terms of retail sales and higher than expected real estate excise tax (REET) collections.

However, some risks due to COVID-19 remain. Worldwide, more infectious COVID-19 variants have led to increased COVID-19 cases and hospitalizations – including in regions with high vaccination rates. Slow supply chain recovery and growth in labor supply has lead to higher than expected inflation.

Near General-Fund
As a reminder, Near GF-S includes revenue from the Education Legacy Trust Account (ELTA), Workforce Education Investment Account (WEIA), and Opportunity Pathways Account (OPA). Summing the changes to the Near GF-S forecasts, total state revenue subject to the budget outlook process is forecasted to increase by $838 million in the 2019-21 biennium, $1.798 billion in the 2021-23 biennium and $2.246 billion in the 2023-25 biennium. These amounts reflect the following increases based on previous amounts:

  • $53.17 billion for the 2019-21 biennium, 15.4 percent over the expected 2017-19 biennium.
  • $58.41 billion for the 2021-23 biennium, 9.9 percent over the expected 2019-21 biennium.
  • $62.15 billion for the 2023-25 biennium, 6.4 percent over expected 2021-23 biennium.

Some context behind the numbers for Near GF-S accounts from which the University receives funding:

  • Forecasted revenue dedicated to the WEIA was increased by $12 million in the 2019-21 biennium, $35 million in the 2021-23 biennium and $7 million in the 2023-25 biennium. Forecasted WEIA revenue is now $358 million for the 2019-21 biennium, $661 million for the 2021-23 biennium and $728 million for the 2023-25 biennium.
  • The ELTA forecast for the 2019-21 biennium was increased by $2 million. Forecasted ELTA revenue in future biennia has been greatly increased by the newly passed tax on certain capital gains of $250,000 or more.
    • The tax will be first collected in FY23, based on calendar year 2022 taxable gains. The first $500 million of the tax gets transferred to ELTA, with the minimum transfer increasing each year with inflation. The ELTA share of the tax is forecasted at $500 million for the 2021- 23 biennium and $1.028 billion for the 2023-25 biennium. The total forecast increase for the 2021-23 biennium is $506 million and the forecast increase for the 2023-25 biennium is $1.022 billion. Forecasted ELTA revenue is now $1.630 billion for the 2019-21 biennium and $1.793 billion for the 2021-23 biennium. Forecasted ELTA revenue for the 2023-25 biennium is now $2.094 billion.

Stay tuned to the OPBlog for updates as we close out the 2019-21 biennium and begin planning for the 2022 legislative session.