Washington quarterly revenue projection down $118 million
FOR IMMEDIATE RELEASE — February 12, 2010
OLYMPIA – The February revenue forecast for Washington state government shows projected General Fund revenue down $118 million for the remainder of this biennium, which ends June 30, 2011. The figure was released today by the Washington State Economic and Revenue Forecast Council.
Included in the forecast was the loss of $154 million through the Dot Foods court case, which cost the state revenue from certain out-of-state companies operating in Washington. Absent that decision, a positive forecast would have occurred. Gov. Chris Gregoire has proposed a legislative fix to this loophole, which would recover a portion of the lost revenue.
Dr. Arun Raha, the state’s chief revenue forecaster, said, “The economy is performing as expected. Economic output has been positive for the last two quarters of 2009, indicating that a recovery is under way. However, employment is lagging and the revenue recovery is still constrained by weakness in the construction sector and cautious consumers.”
“Although our economy appears to have stabilized, we must continue to focus on job creation,” Gregoire said. “We can and must encourage employers to start hiring and capitalize on new opportunities. I urge the Legislature to adopt my plan to accelerate our recovery and give businesses the confidence they need to create jobs.”
Revenue for the current budget period, 2009–11, is projected to decrease $118 million, resulting in total projected General Fund revenue for the biennium of $28.7 billion. The Revenue Forecast Council also issued its first forecast for the 2011–13 biennium, which is $32.2 billion.
“It is positive that we see less volatility in this forecast,” said Victor Moore, director of the state Office of Financial Management. “This stability makes it easier to make decisions about the future. But that still doesn’t help us much with our current shortfall, which now stands at $2.8 billion. We continue to have conversations with the Legislature to finalize a solution that includes both program cuts and some new revenue.”
The governor released her budget proposal in January, which includes $1 billion in cuts. The Legislature is currently crafting its own proposal to close the shortfall.