More red ink: WA revenue forecast drops $778m
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Washington's glacial economic recovery is still bleeding red ink. The state Revenue Forecast Council has just cut more than $778 million from the estimate of expected tax revenue, driving the state's projected deficit to about $5.1 billion.
That compares with the current $30 billion two-year state budget. Lawmakers have been cutting spending for the past several years and recently adopted cuts for the current fiscal year. Budget Director Marty Brown said there is still a gap of about $200 million to deal with in the next few months.
The House is expected to unveil its 2013-15 budget proposal next week.
Both chambers are controlled by Democrats. Democratic Gov. Chris Gregoire has continued to insist that lawmakers find a no-new-taxes solution, but some lawmakers are looking at fee increases and other forms of new revenue. An actual tax hike would take a two-thirds vote in both chambers or a vote of the people.
The new forecast was unanimously adopted by the bipartisan Forecast Council, which has a member from each of the legislative caucuses, plus Gregoire's budget and revenue directors. It shows continued gloomy forecasts as the economy continues to sputter. The red ink includes about $80 million less in the current fiscal year that ends in June, and nearly $700 million less than forecast in November for the upcoming two-year budget cycle.
The council's director and chief economist, Arun Raha, said there remains "a great deal of uncertainty" around the globe, with soaring oil prices, the situation in Japan, and so forth.
He put it this way:
"Headwinds anticipated in the November forecast continue -- slow job growth, a sluggish housing market, tight credit for small businesses, consumer retrenchment after the holidays, and fiscal drag from the federal stimulus winding down as well as state and local government expenditures."
Until the recent uncertainties hit, the state economy was actually starting to recover, and Boeing landing the $35 billion tanker contract looms as great news for coming years, Raha said.
House Ways and Means Chairman Ross Hunter said, "The problem has become more daunting. ... This is a very difficult situation. We'll try to do the least bad solutions." His Senate counterpart, Ed Murray, said he was prepared for the new downturn and will work with GOP colleagues in the Senate to draft an acceptable budget. "Bracing for it (the big downturn) doesn't mean I have the votes for it," he said.
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Secretary of State
Steve Hobbs
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