On April 15, toward the end of the 2021 session of the Indiana General Assembly, the State Budget Committee heard the revised revenue forecast. It was $2.4 billion more than the initial forecast from December 16. That’s “billions,” with a “b”. It was a forecast for the ages.
Why did it happen, and what does it mean?
2021 was a budget year for the General Assembly. The constitution requires that the legislature come up with a budget for state spending for the next two fiscal years. That’s fiscal year 2022, starting on July 1, and fiscal year 2023, starting on July 1, 2022, and ending June 30, 2023.
A budget is a plan, to set state spending as far out as 26 months from the day it passes. Legislators don’t know what revenues will be over the next two-plus years, so they need a guess. That guess is the revenue forecast.