September 16, 2011

Washington's New Biennial Budget Crunch

From the Public News Service

OLYMPIA, Wash. - Washington state government could take in $1.4 billion less revenue than anticipated for 2011 through 2013 for the General Fund, according to the state's chief revenue forecaster. Even so, Dr. Arun Raha had some good news in his presentation on Thursday to the State Economic and Revenue Forecast Council.

Farmers and exporters are doing well, Raha says, and so are Boeing and Microsoft. However, he told the council, it hasn't been enough to compensate for the drag from other industries.

"Part of the problem here is that construction accounts for 5 percent of the economy, but 10 percent of revenues - and construction is not going anywhere for another 12 to 18 months, the best I can see. That's what's holding revenue back."

Next week, state agencies will turn in tentative plans requested by the governor to trim another 5 percent or 10 percent from their budgets. But Greg Devereaux, executive director of the Washington Federation of State Employees, says he isn't pessimistic. He agrees with Dr. Raha that the national economy takes much of the blame for the state's recession, and thinks members of Congress will set aside their differences to provide some relief.

"I don't think either side will turn down the tax credit for payroll for both employee and employer; and I don't think either side will turn down the infrastructure (proposal). It may not be exactly what (President) Obama has proposed, but I think at least two-thirds of Obama's jobs bill will go through."

The Washington Legislature has already cut the state budget by $4.6 billion for this biennium, which began July 1. There is now talk of a special session and a supplemental budget, perhaps before the November budget forecast.

The council meeting and Raha's presentation can be viewed online at
Chris Thomas, Public News Service - WA

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