Budget Section: OMB reports revenue near forecast, biennium ending balance higher than prior estimate

The Budget Section heard a financial update from Joe Morrissette of the Office of Management and Budget on the state’s fiscal position through the month of February. Morrissette said total revenues are about $2,000,000 above the legislative forecast — a variance he described as “a tenth of a percent” — and reported an estimated ending balance for the biennium of roughly $397,500,000, about $170 million higher than the legislative estimate from the last session.

Morrissette walked members through several special funds and how oil-tax allocations are being distributed. He said the stabilization fund is well above its statutory target, the legacy fund sits at just over $14 billion with ongoing oil-tax allocations, and the Foundation Aid Stabilization Fund has about $531 million with a required balance of $261 million for K–12 aid.

On tax-type performance, Morrissette said sales tax collections are tracking close to forecast, motor-vehicle receipts are below forecast, individual income taxes are roughly 10% below the official estimate, and corporate income taxes are nearly 20% above. He described the mix as “quite a mix” that overall leaves collections near the forecast.

Representative Nelson asked whether a rise in the effective tax rate (reported at 9.19 versus a forecast of 8.96) reflects changes in stripper-well status. Morrissette replied that the effective rate is the average across all returns and is influenced both by new wells paying the full rate and by exemptions; he said stripper wells are one factor that “lowers that from 10% to closer to 9%.”

Morrissette also reviewed payroll irregularities and vacancy savings. He told the committee that several agencies reported incentive and temporary pay items and that vacancy savings through January totaled about $8.3 million from the general fund and roughly $9.5 million from other funds, with approximately $7.8 million of those savings used to date.

The presentation closed with an update on the voluntary separation incentive program: 19 agencies opted to participate, roughly 4,000 employees are in the participating agencies, and the application window closed at the end of the month. Applicants may elect either a lump-sum payment equal to three months’ salary and benefits or to remain on payroll for three months after separation. Morrissette stressed that agencies must show a savings or efficiency gain under statute before accepting an application.

The committee did not take action on the OMB report; Morrissette said detailed agency reports and a longer 40‑page appendix are available on request.