Washington state government can expect to bring in $16.1 million less than projected in the current budget cycle because of a lackluster economic recovery, forecasters said Wednesday.
That figure is relatively stable compared to forecasts in recent years, which included downward revisions in the hundreds of millions of dollars and forced the Legislature to make dramatic spending cuts. Lawmakers completed their session in April by leaving enough in reserves to handle the slight reduction in projected revenue, so they should be able to avoid any special budget actions unless the economy encounters a hiccup.
“Stable is good,” said Democratic Rep. Ross Hunter. “This forecast is essentially no change to where we were when we left the session.”
Forecasters still have a variety of concerns – the debt crisis in Europe, a possible slowdown in Asia and gridlock in Washington, D.C. – and they say it’s possible that revenue could still decline by $1 billion or more over the next 12 months. Republican Rep. Ed Orcutt said he was leaning to the pessimistic side until he could see some real sustained growth in the economy.
“I’m extremely concerned,” Orcutt said.
For the new two-year budget cycle that begins in July 2013, the forecast projects a 7 percent increase in revenue. But accounting for the general growth in state spending needs, such as more kids enrolling in school or relying on state services, lawmakers will have a balance sheet of about $100 million positive or negative, said Gov. Chris Gregoire’s budget director Marty Brown.
Gregoire said the forecast was welcome news.
“The economy is slowly recovering, but is not yet stabilized,” Gregoire said. Our priority has been and will continue to be to put people back to work and get the economy on its feet.”