835

SPECIAL NEWS CONFERENCE, JOINTLY WITH
LEGISLATIVE LEADERS, ON ANTICIPATED REVENUES

June 4, 1968

OPENING STATEMENT BY THE GOVERNOR

This afternoon I asked the legislative leadership, along with cer-
tain of the State's fiscal people, to an emergency meeting which came
about as a result of the recent disclosure from the Board of Revenue
Estimates that the anticipated revenues from the new income tax had
fallen seriously short of their February predictions. In February the
prediction was $296, 000, 000 and just a few days ago that was revised
to 1262, 000, 000 which would project for the remainder of this fiscal
year a $30 million shortage and for the coming 1969 budget year an
additional shortage of $36 million. What I'm really saying is that
the projections for the new tax are $66 million off for the remainder
of this year and the next budget year.

We discussed this in considerable detail and one thing is certainly
clear — that the reason is not apparent to anyone. The economy is
certainly not off seriously enough to cause this kind of shortage, and
while there has been a great amount of speculation as to what factors
could be involved in this problem, nothing has at the moment been
found that can logically lead to a conclusion compatible with this
situation.

The legislative leaders and I are in agreement that no reason for
panic exists at the moment. There is no need to call the Legislature
into special session until the figures given to us by the Board of
Revenue Estimates can be examined in more detail, and until the
remainder of the 109 thousand tax returns have been processed. I
might say that there's little chance that the additional money to be
found from these returns which have not yet been opened and de-
posited could rectify the situation, but certainly we've got to investi-
gate very thoroughly the reason for the shortage and it's not apparent
to us at the moment.

Meanwhile, I have instructed the State Budget Department, and
they have already acted, to impose freezes on the employment of per-
sonnel for jobs already approved, to impose freezes in spending for
the remainder of this fiscal year. The State agencies are going to be
cut back; these cutbacks will not await the September final evaluation
of the situation. I think we've got to be conservative and carry
through with the type of conservatism which was manifest in the re-