Washington Quarterly Revenue Projection Down $132 million
FOR IMMEDIATE RELEASE—November 15 , 2007
OLYMPIA—The November revenue forecast for Washington state government shows projected General Fund revenue down by a combined $132 million for the recently concluded biennium and the next two year budget period.
Dr. Chang Mook Sohn, the state’s chief revenue forecaster, said that most of the predicted revenue change was due to an expected slowdown in real estate activity, which has appeared a few months sooner than expected. He observed that Washington’s housing and construction sectors are still outperforming the U.S., a trend that is predicted to continue. Dr. Sohn noted that the change in the forecast is less than one half of one percent of total general fund revenue for the biennium.
“Though the decline in projected revenue is very small, this forecast reinforces the need to continue to save money to make sure we have the resources to maintain the services expected by Washington citizens,” said Governor Chris Gregoire. “I am pleased the voters recently approved the rainy-day fund so we can automatically set money aside to be prepared for the future.”
Economic signals are mixed both in Washington and across the nation. Recent state employment growth numbers are holding up and Washington aerospace and software industries are still doing very well. Recent national employment numbers are fairly strong. However, the latest U.S. retail sales numbers are weak and problems still exist with rising oil prices and the sub-prime mortgage situation.
“Economic growth in Washington remains solid, despite this very minor downward revision in the forecast” said Victor Moore, director of the state budget office. “Job growth in Washington continues to outpace the national average and Washington had the second highest increase in personal income in the nation for the second quarter of 2007.”
Revenue for the recently concluded 2005-07 Biennium was revised downward by $2 million. For the current budget period, 2007-2009, the new forecast shows revenue down $130 million, resulting in total projected revenue for the biennium of $29.9 billion. About $112 million of the decline is due to a small change in the economic outlook, with the remaining $20 million attributable to a change in federal law dealing with Internet taxation.
“I am pleased that the revised forecast leaves $954 million in unobligated General Fund revenue for 2007-09,” added Moore. “The rainy-day account proposed by the Governor and passed by the voters will contain another $430 million in protected reserves.”
Contact: Glenn Kuper, Office of Financial Management, 360-902-7607