Some concerns are starting to come from the state budget office that funding for services and institutions will fall millions of dollars short by the end of this fiscal year.  Some early discussions of cuts or withholdings have started.

Halfway through the fiscal year, the state is collecting slightly more taxes than it was a year ago.  But a Christmas bump didn’t happen..  In fact, sales taxes were down four percent from December, 2010–a month that was 13 percent under 2009’s figure.  Corporate tax collections are down ten percent.  

So far, total state tax collections are up only 1.2 percent and losing ground..State budget director Linda Luebbering says tax collections need to grow by about four percent for the rest of the fiscal year for the state to hit budget targets based on a 2.7 percent revenue growth. . .

Tax collections peak in the last quarter of the fiscal year, driven by income tax collections in April. And with unemployment going down, income taxes are expected to go up.  But there are concerns they won’t go up enough.  

Luebbering says she and the governor have been talking regularly but they have not identified specifically will be done if enough taxes don’t come in to pay all the bills.

AUDIO: Luebbering interview   8:15 mp3