As Kriss wrote last week, the September revenue forecast for 2021–23 and 2023–25 is down $452 million compared to the June revenue forecast. However, revenues for these biennia are expected to be $1.636 billion above the February revenue forecast (on which the current budget was based).

The governor will propose a 2023–25 operating budget after the November revenue forecast, and the Legislature will adopt a 2023–25 operating budget after the March 2023 revenue forecast. That budget will have to balance through 2025–27. Over the three-biennia period (2021–23, 2023–25, and 2025–27), the September revenue forecast is $518.0 million below the June forecast but up $1.747 billion from the February forecast. Chart 1 shows the revenue history for funds subject to the outlook (NGFO) and how the forecast has changed this year.

Kriss also noted that inflation is expected to exceed revenue growth in 2023–25. Chart 2 shows NGFO revenues in both nominal and inflation-adjusted terms. Nominally, NGFO revenues are now expected to increase by 18.9% in 2021–23, 3.7% in 2023–25, and 7.1% in 2025–27. Adjusted for inflation, they are forecast to increase by 8.8% in 2021–23, decrease by 1.8% in 2023–25, and increase by 3.1% in 2025–27.