Washington’s Quarterly Revenue Projection Up By $412 million
FOR IMMEDIATE RELEASE – September 20, 2006
OLYMPIA – The September revenue forecast for Washington state government shows projected General Fund revenue over the next three fiscal years up by $412.2 million.
For the last year of the current 2005–2007 budget cycle, the forecast shows revenue rising by $349.8 million from the prior quarterly forecast in June. For the coming budget biennium, beginning July 1, 2007, the new forecast shows revenue up by another $62.4 million.
Dr. Chang Mook Sohn, chief state revenue forecaster, said his latest quarterly projection reflects a regional real estate market that is stronger than predicted last June. Dr. Sohn noted that even though the real estate market is cooling off, it is still generating more revenue than expected. Although predicted revenue collections are higher compared with the June forecast, Dr. Sohn’s new forecast calls for slower growth in the next biennium. Noting that current housing activity and exceptionally strong consumer spending is not sustainable, Dr. Sohn lowered the revenue growth forecast for next biennium from 5 percent per year to 4.1 percent.
Governor Chris Gregoire said that the continued strength of the economy shows that Washingtonians are going back to work. More than 123,000 jobs have been created in the past 18 months. She added that the projection cautions against unbridled government spending.
“My promise has always been to make government more accountable,” said Governor Gregoire. “As we go into the next budget cycle we must have the discipline to make common sense investments that work.”
“The new forecast will be incorporated into the upcoming two–year budget proposal,” added Victor Moore, director of the Governor’s budget office. “But we will continue to propose expenditures based on evidence of effectiveness, and based on what our citizens need the most.”
For the 2005–2007 budget biennium, the new forecast leaves $1.8 billion in general fund and other reserves.