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Washington’s Quarterly Revenue Projection Rises by $158.9 million

FOR IMMEDIATE RELEASE — February 15, 2006

OLYMPIA – The February revenue forecast for Washington State government shows projected General Fund revenue for the current two-year budget cycle is up $158.9 million from the last quarterly forecast in November, putting revenue for the budget biennium ending June 30, 2007 at $26.5 billion.

Dr. Chang Mook Sohn, chief state revenue forecaster, said his latest quarterly projection contains “downside risks,” which include a slowing housing market, volatile world oil prices and rising interest rates to combat inflation.

“Obviously, the forecast is yet another indication that Washington’s economy has legs. It is great for our hard-working men and women, and it makes the job of meeting the critical needs of our citizens easier,” said Victor Moore, director of Governor Chris Gregoire’s Office of Financial Management.

“As Dr. Sohn and the Governor’s Council of Economic Advisors has cautioned, however, our economy’s sustainability rests on some volatile factors – a weakening housing market, instability in oil-producing nations, and the pressure of higher interest rates. As we write a budget now, we need to be mindful of future needs,” Moore said.

For the coming budget biennium, beginning July 1, 2007, the February forecast shows revenue totaling $29 billion.

The new forecast leaves $1.63 billion in reserve, meeting the governor's goal of saving in the current biennium as much new revenue as possible so adequate funds are available to finance important state services in the next, two-year budget period.