The March revenue forecast for Washington state government shows projected General Fund revenue down $778 million, compared to the previous quarterly forecast last November. The forecast covers the remainder of the current biennium (200911) as well as the next budget period (201113). The figures were released today by the Washington State Economic and Revenue Forecast Council.
Multiple factors are stifling the state’s economic recovery, according to Dr. Arun Raha, the state’s chief revenue forecaster.
“Recent geopolitical developments have cast yet another shadow over the economic recovery,” Raha said. “The uncertainties around oil prices and the tragedy in Japan are combining with the slow housing market to hold us back.”
Over the past three quarterly forecasts starting in September 2010 revenue projections for the current budget and the next two-year budget have declined by a combined $3.4 billion.
Under today’s forecast, revenue for the current budget period is projected to decrease $80 million from the November forecast. Total projected General Fund revenue for the biennium is now $28 billion. Revenue for the next budget period is projected to decrease $698 million, resulting in total projected General Fund revenue for that biennium of $31.9 billion.
“While we have seen some encouraging signs in the state’s economy, today’s forecast further illustrates the fact that this recovery is going to be a long haul,” said Marty Brown, director of the state Office of Financial Management. “We must act quickly in closing the remaining shortfall in the current budget so we can begin tackling the even greater challenges in the next budget.”
Governor Gregoire’s proposed 201113 budget, which was released in December, addresses the shortfall through approximately $3 billion in cuts and $1.1 billion in savings by suspending Initiatives 728 and 732. The balance of the solution is achieved through pension reforms, fund transfers and use of the state’s rainy day fund. The House and Senate are currently working on their own proposals to close the shortfall.