Although white smoke didn’t rise from the Statehouse when they finished, it was still news when members of the Revenue Estimating Conference came up with their new Rhode Island budget numbers last week. And for the first time in awhile, their abacuses offered up some limited good news.

When all was said and done, the conferees determined that the state budget is running about $2 million in the black so far this year, House spokesman Larry Berman told me in an e-mail. That’s a drop in the bucket in a $7.8 billion budget – but it’s a lot better than the $200 million deficit the state was running at this time last year.

Because this year’s budget is still balanced, Gov.-elect Chafee and the new General Assembly will be spared having to make painful midyear cuts the way Gov. Carcieri and lawmakers have had to every winter in recent years.

Berman credited the balancing act to higher tax revenue, lower spending, and a surplus left over at the end of last year. “It is also good sign that revenues are running slightly ahead of projections, showing that the economy is turning around slowly,” he said.

Unfortunately, there are storm clouds on the budget horizon. This year’s budget may be balanced, but next year’s – for the 12 months that start July 1, 2011 – ain’t. And as I mentioned last week, the problem is only expected to get worse in the years that follow.

The new projected budget shortfall for 2011-12 is $290 million, State Budget Officer Thomas A. Mullaney said last week – a big hole to fill. Chafee and his aides will have only a month to craft a plan for closing that gap after he gets inaugurated on Jan. 4.

(image credit: RI.gov)