State revenue forecast sheds $529 million

By Brad Shannon | The Olympian • Published September 19, 2008

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Fewer housing permits, falling car sales and fewer jobs in the construction sector helped blow away $529 million in expected future state tax collections, top state revenue forecasters said Thursday.

Food stamp use on rise in Washington

The state Department of Social and Health Services says nearly 22,000 more Washington families received food stamps in August, compared with a year ago.

About 300,000 households with nearly 600,000 people use food stamps each month.

The department says 23,000 more households will become eligible in October, when limits are eased. A four-person household with annual income of $42,400 will qualify for food stamps.

The state distributed about $680 million in federal food benefits in the fiscal year that ended in June.

The Associated Press

The new quarterly forecast, issued by the Office of the Economic and Revenue Forecast Council in Olympia, sets up a potential $3.2 billion budget shortfall in 2009.

In response, Gov. Chris Gregoire ordered her budget director to look for $200 million more in cost savings. Gregoire last month ordered a hiring freeze, along with fuel-use and travel reductions, to save an estimated $90 million in the next nine months.

"The national economic slowdown is clearly affecting Washington's economy," Gregoire said in a statement released after the forecast. "We anticipated this decrease, and we are better prepared to weather this storm because of fiscally responsible initiatives such as the Rainy Day Fund and adjustments to spending over the past few months."

Gregoire's Republican challenger for governor in the Nov. 4 general election took shots at her for the budget shortfall.

"The first step to solving this deficit is actually acknowledging that there is a problem and admitting that the deficit is real," Rossi said in a campaign statement. "The incumbent has shown a complete unwillingness to do so.

"It's wrong to blame this deficit on the national economy. We already had a projected deficit in excess of $2 billion long before the recent bad economic news," Rossi said.

State revenue is expected to fall $273 million short of June predictions for the next nine months. The revenue drop in the next 2¾ years will be a combined $529 million, interim revenue forecaster Steve Lerch said.

"So we are definitely slowing down," Lerch said.

He added that the economic slowdown is not as great in Washington as it is for the United States as a whole, but he cautioned that a 2.9 percent decline in retail sales collections in the second quarter was "a big deal" not seen since the last recession.

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