Investor Presentaiton

The Bottom Line For All Three Years... 2023 Long-Range Financial Outlook Summary General Revenue Fund ($Millions) Revenues Available Year 1 FY 2024-25 Year 2 FY 2025-26 Year 3 FY 2026-27 47,557 48,725 50,074 Unused Reserve from Prior Year 8,530 8,883 7,260 Reserves (1,855) (1,900) (1,953) Revenue Expenditures Adjustments I Recurring Base Budget (41,703) (44,258) (47,094) Critical Needs Budget Drivers (1,807) (2,123) (1,456) Other High Priority Needs Budget Drivers (3,067) (3,205) (3,216) Ending Balance After Expenditures 7,655 6,122 3,614 Tax and Fee Changes (647) (781) (916) Trust Fund Transfers 20 20 20 Revenue Adjustments (627) (762) (896) Surplus/ (Deficit) 7,028 5,360 2,718 Portion of Surplus that is Generated from Recurring $s 2,964 976 130 Portion of Surplus that is Generated from Nonrecurring $s 4,064 4,384 2,588 Overall, the forecasted General Revenue growth (recurring and nonrecurring) is sufficient to support anticipated spending and a minimum reserve for each year of the Outlook. Fiscal strategies will not be required because the projected budget is in balance as constitutionally required. However, the decreasing ending balances indicate the projected expenditures are beginning to outpace available revenues. Of particular concern, the recurring expenditure demands (both budget drivers and revenue adjustments) consume nearly all of the recurring revenues by the end of the forecast period, signaling a structural imbalance may be emerging, absent any prior corrective actions. 21

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