Posts tagged: revenue forecast
OLYMPIA — Washington's revenue forecast was up just slightly for the rest of this biennium, and through the next two-year budget cycle, a state panel was told this afternoon.
On the upside, construction is improving and employment should slowly rise, although it won't get back to pre-recession levels until sometime in 2014. On the downside, manufacturing is off a bit and so are exports except for airplanes, state economist Steven Lerch told the Economic and Revenue Forecast Council.
Bottom line, the state can expect to collect $30.469 billion for 2011-13, which is up about $29 million from last June's forecast; it can expect to collect $32.649 billion for 2013-15, up about $22 million from that previous forecast. It can expect $35.5 billion in 2015-17, the first time forecasters have looked out that far.
The biggest risks — economic slow down in China, problems in the Eurozone and the federal government's willingness to consider across-the-board cuts — are all outside the state, Treasurer Jim McIntire said.
In recent years, some forecasts have been so bad that they prompted calls for special sessions of the Legislature and calls for deep cuts or new taxes. This time, legislators on the council were willing to wait until January, and the regularly scheduled session that will follow the election.
There's still a shortfall of about $1 billion the next Legislature will need to close, Lerch said. Or about $500 million if it uses up the reserve funds.
It's clear the economy isn't going to grow fast enough to provide revenue needed for things like education improvements being ordered by the state Supreme Court, Sen. Ed Murray, D-Seattle and the chairman of the Senate Ways and Means Committee said.
But the Legislature can look at the next forecast, due out in November, and look for some adjustments through the end of June that would add to the reserves, Rep. Ed Orcutt, R-Kalama, the chairman of the council said.
Sen. Dino Rossi, R-Sammamish, who was recently appointed to the Legislature and the council to fill vacancies, said the biggest problem with the economy is that Washington needs to become “a business-friendly state” to attract businesses and jobs.
“Many of the problems in the budget are self-inflicted,” said Rossi, who chaired the Ways and Means Committee during his previous tenure. Medicaid will be a big drain in a few years because Democrats “have swallowed Obamacare hook, line and sinker.”
Murray defended the current budget, which he helped author. All budget writers face the same problems and wrestle with the same tough choices, he added: “It's unfortunate this forum is degenerating into a campaign forum.”
“Facts are stubborn things,” replied Rossi.
“So is history,” countered Murray.
OLYMPIA – Washington might get the most optimistic budget outlook in years Thursday when state economists deliver the latest revenue forecast.
The demand for state services may be lower and the amount of expected revenue may be higher than last November, signaling a shift of more than $500 million to the good.
Things may be so good, in fact, that on Wednesday Republicans were already worrying the forecast could take the pressure off majority Democrats to agree to some long-term reforms the GOP has been pushing. . .
OLYMPIA – The state’s most likely revenue outlook for the next two years dropped slightly Wednesday as the state’s chief economist revised his projections down about $183 million because of what he calls a “soft patch” in the recovery.
The state should collect $31.603 billion in its general fund to spend on a wide array of programs, services and salaries, Arun Raha said, or about sixth-tenths of 1 percent less than the revenue projected in March…
OLYMPIA — With the projected gap between income and expenses growing another $500 million to $5.1 billion, Gov. Chris Gregoire said the Legislature may be forced to eliminate popular programs they had hoped to merely trim.
They aren't going to be able to raise taxes, and they shouldn't try some of the budget “gimmicks” being suggested by some Democrats, such as adding revenues from a “25th month” into the 2011-13 budget or borrowing money by selling more bonds. Asked if she would veto any such plans, Gregoire replied: “Don't bring it to me.”
She would consider increasing gambling options, and even a proposal to license and regulate medical marijuana, which supporters say would bring in more revenue to the state. Saving money in the Corrections Department by allowing early release of more felons is “the last place I'd go.”
She also discounted a suggestion by Republicans the Legislature should reject contracts her staff has negotiated with state employees' unions for the coming biennium and demand more cuts in wages and benefits. The contracts already have a 3 percent wage cut after several years without cost-of-living increases, furloughs and increases in health care costs, proof that “public employees have stepped up to the sacrifice,” she said.
Rejecting the contracts could mean the state pays the higher wages and benefits rates of the current contracts for the first year, and a guarantee of a better deal in the second year of the budget cycle is “a hard promise to keep,” she said.
In her budget proposal in December, Gregoire proposed eliminating a series of state programs not required by federal law, including the Basic Health Program and the Disability Lifeline. Legislators balked, saying they'd rather reduce the programs by reducing the income levels that make a person or family eligible, and that system worked for a supplemental budget that patched the shortfall for the rest of this budget. Asked whether they'd be able to do that for 2011-13, Gregoire was doubtful: “I don't know. I think it's tough.”
An hour before her press conference, the Capitol Rotunda and hallways outside her office were filled with protestors demanding that the state cut tax breaks for businesses, and raise more tax revenue, rather than cut programs. She offered no hope that would be a strategy she'd follow.
“It's much easier said than done. How am I going to get a two-thirds vote?” she said. Closing tax exemptions are considered a tax increase, which requires a two-thirds majority in both houses under an initiatives the voters passed in November.
OLYMPIA — The gap between state projected revenues and current programs grew by $778 million in the latest economic forecast for the next 27 months, resulting in a possible deficit of about $5.1 billion if nothing were changed in the next biennial budget.
Arun Raha, the state's chief economic forecaster, said several factors are stifling economic recovery in the state: Uncertainty over oil prices, the tragedy in Japan and a slow housing market. “Clouded with a great deal of uncertainty,” is the way he put it.
Revenue is projected to drop another $80 million for the rest of this biennium, which ends on June 30. It will be about $700 million lower for the 2011-13 biennium.
The forecasting council released a preliminary forecast two weeks ago, but since that time, the earthquake and tsunami hit Japan, which is one of the state's major trading partners, Raha said.
“The preliminary economic forecast presented two weeks ago is already outdated,” he said. Forecasts have updated their models with “early and rough estimates” of the effects of the disasters in Japan.
Washington State’s economics experts will tell folks how well or how poorly they expect the state to do as far as collecting revenue in the coming months and years at 10 a.m.
It’s the Revenue Forecast, which is made roughly quarterly, and lets state officials know whether they need to make any corrections in the budget. The state is already holding its breath to find out whether it will get some $480 million from the federal government in extra Medicare/Medicaid payments, and any drop in tax revenues will be a secondary jolt.
Speaking of that extra fed money, which is known as FMAP for federal medical assistance percentage, the U.S. Senate is supposed to try yet again to get 60 votes to move a bill with that in it sometime today. An attempt earlier this week failed.
Also in Congress, Rep. Cathy McMorris Rodgers and Sens. Patty Murray and Maria Cantwell have a resolution giving Spokane a congressional high five for being the home of Father’s Day, 100 years ago. In honor of the centennial, the resolution establishes 2010 as Father’s Year. Even though by June 17 it’s actually more of a half year, please resist the urge to go out and buy a tie a day through Dec. 31
For full text of the resolution, go inside the blog: