Revenue optimism must be mixed with caution
We must echo State Treasurer Tate Reeves and other officials whoare tempering caution with their optimism in the wake of higher taxrevenue collections last month.
Following poor August and September totals, October’s revenuecollections were $23 million above estimates. October’s numbershave helped the state be about $19 million ahead of revenueprojections for the fiscal year that began in July.
Casinos and other businesses continuing to pay employees, RedCross assistance, insurance settlements and a variety of otherfactors due to Hurricane Katrina likely contributed to the goodcollections month. The windfall, though, may only be temporarybecause the hurricane’s full impact on the state cannot bedetermined now.
Reeves and other state economic forecasters are well advised tonot draw any rosy pictures about future revenue estimates based ona few months of collections. And state lawmakers, regardless of anygood intentions, certainly must not rush headlong into a spendingspree when they return for the 2006 regular session in January.
From a revenue standpoint, October certainly was a sunny monthfor the state. Officials, however, must be cautious and preparedfor any future financial storms as the state continues its recoveryfrom the hurricane.