The Revenue Estimating Conference published their December predictions for fiscal year 2011 (July 2009 - June 2010). We know the margin of error for REC net revenue predictions for the following year 3.9%–higher than the ideal margin of error. REC revised, downward, their prediction to $5.403 billion in net revenues. Given their historical accuracy it may be somewhere between $5.192 to $5.613 billion next year.

[caption id=”attachment_459” align=”aligncenter” width=”600” caption=”State net revenue in millions”][/caption]

The new estimates anticipate fiscal year 2011 net revenue will be at nominal levels close to fiscal year 2007. However, REC’s estimates tend not to “pivot” with the economy. As the economic data indicates the recession is ending, we should expect REC to begin underestimating net revenues.

It’ll be August 2011 before we know if the estimates are correct. If anything, I suspect it’s an underestimate. The bigger story was current year tax estimates came in high enough so further cuts aren’t needed. Although, we could have avoided some of the mess through better forecasts.