Yesterday the Governor signed the 2011-13 biennial budget which left $730 million in total reserves for the upcoming biennium. As a result of today’s revenue forecast, the total reserves have been reduced to $163.3 million for the next two years.

The June economic and revenue forecast shows a decline of approximately $570 million in revenue for the 2011-13 biennium. In addition the forecast showed a drop of $84 million in revenue for the current biennium.

State Economist, Dr. Arun Raha, echoed the comments he made earlier this month when the economic review was released, suggesting that while the economy is improving it is doing so at a slower pace.

Raha cited sustained high gas prices and disruptions to the manufacturing supply chain  due to power shortages in Japan as the culprits.  Despite these hiccups the recovery is continuing and may even pick up momentum in the second half of the year as oil prices stabilize and Japan starts to rebuild.