AUGUSTA – State tax officials are already making plans to revise economic forecasting methods that failed to identify a $180 million revenue shortfall which was clearly predictable, according to one prominent Wall Street analyst.

John Youngdahl, an economist with Goldman Sachs in New York, agreed with Gov. Angus S. King’s contention that the federal government and many of the states were stunned by recent news of the plummeting decline in capital gains revenues. Researchers at Goldman Sachs, however, had been warning investors to expect a major drop in receipts months before the April 15 tax filing deadline.

“We took a definite minority position in advance of April 15 that receipts would be far below official expectations, and were fairly lonely in that point of view,” Youngdahl said Tuesday. “I’m not sure why so few official and private analysts expected this; after all, various private groups were estimating an 80 percent or greater drop in mutual fund capital gains distributions, and everyone knew about the debacle in the stock market last year.”

Youngdahl surmised that the fact that detailed analyses of federal tax results sometimes lag as much as a few years behind current market assumptions could have been a major contributing factor explaining why the decline took so many financial experts by surprise.

“So the reasons behind the surge in tax collections during the late 1990s and 2000 have not been fully appreciated or understood,” he said. “This probably led to cautious forecasts for the decline in seasonal tax payments, when as we saw it, the stars had aligned in favor of a huge drop.”

State financial analysts must learn from this experience, Youngdahl said, and devise methods for a more detailed analysis of the factors that drive tax collections. Until now, Youngdahl said, there has been too strong a tendency to extrapolate from the past into the future without questioning whether the underlying conditions that accompanied or gave rise to the past results, such as lofty stock prices and heavy capital gains incomes, were still in place.

“I think that’s well-stated,” agreed Janet Waldron, the state commissioner of the Department of Administrative and Financial Services. “The economy has changed and the dynamics of our economy have changed. He said it very well. I guess we’ll have to get on their mailing list.”

Waldron, King’s chief financial analyst, pointed out that the administration’s forecasts had, in fact, predicted a 23 percent decline in capital gains revenue which ultimately, she said, may end up in the 50 percent to 60 percent range. While the actual estimated loss of $90 million a year only amounts to 3.7 percent of the state’s annual tax collections of about $2.4 billion, Waldron said, the need to replace the revenue before the fiscal year ends June 30 created an emergency situation for the administration.

Waldron said her department would be looking at different methodologies in the future to get a better fix on trends state revenues seem to be following. For the short term, the administration plans to wait until revenues for May and June have been received before recommending any corrective changes in the course of the state’s fiscal projections.

“We plan to refine the process and improve it as we go forward,” she said.