Washington Quarterly Revenue Projection Up $484 million
FOR IMMEDIATE RELEASE—June 14 , 2007
OLYMPIA –The June revenue forecast for Washington state government shows projected General Fund revenue up by a combined $484 million over the remainder of this fiscal year and the next two.
Dr. Chang Mook Sohn, the state’s chief revenue forecaster, said that the Washington economy continues to outperform the U.S. economy, especially in the areas of construction and real estate. Dr. Sohn noted that Washington’s real estate market is holding up well and not slowing down as much as the rest of the nation, although some slowdown is still expected. Two of the state’s leading industries, software and aerospace, are also performing well.
Our strong export markets have cushioned us from the national slowdown. Aerospace and other leading export industries in Washington are benefiting from a strong global economy and favorable currency exchange rates. Exports originating in Washington totaled $53.1 billion in 2006, a 40 percent increase over 2005.
Washington continues to outperform the national average on employment growth (2.1 percent vs. 1.4 percent) and the new jobs are predominantly in higher paying job sectors (aerospace, computer technology, construction, and professional and business services). Washington’s April unemployment rate of 4.4 percent was the lowest in history.
“This forecast is a good sign that our economy is still strong,” said Governor Chris Gregoire. “This strengthens my conviction that we made the right investments in education, health care, and jobs. But we are very much aware that high fuel prices and weaknesses in the US real estate market can affect Washington in the future. We must continue to be fiscally responsible.”
For the last year of the current 2005-2007 budget cycle, the forecast shows revenue rising by $195 million from the prior quarterly forecast in March, bringing total revenue for the biennium to $27.7 billion. For the coming 2007-2009 biennium that begins July 1, 2007, the new forecast shows revenue up another $289 million, resulting in total revenue for the biennium of $29.8 billion.
“This forecast provides fresh evidence that our economy is continuing to move forward,” added Victor Moore, director of the state budget office. “This allows us to increase our reserves, which includes the proposed rainy-day fund, so we can protect our important investments in education, health care, and economic development against potential economic downturns.”
The revised forecast leaves $875 million in unobligated General Fund revenue for 2007-09. The Governor and Legislature have proposed a constitutional amendment for the November ballot which would leave another $361 million in a protected rainy-day account.
Contact: Glenn Kuper, Office of Financial Management, 360-902-7607