State’s Economy Thriving Even Layoffs At Hanford, Boeing Haven’t Darkened Economic Picture

The Legislature’s 1996 session will start in the glow of an enduring economy, stable revenue collections and a budget surplus of nearly $700 million, state economists said Thursday.

Even big layoffs at Boeing and the Hanford Nuclear Reservation, followed by the ongoing Machinists union strike at Boeing, have not darkened the bright picture that state economist Chang Mook Sohn and his staff have been painting since last spring.

They attribute the economy’s strength and healthy revenue projections to many forces, but the biggest is continued growth in the state’s software industry.

Sohn, in his quarterly revenue projection, put anticipated general-fund income for the two-year budget cycle at $17.668 billion, down a scant $15.3 million from the last quarterly projection.

“Our revenue is essentially unchanged,” said Senate Majority Leader Marcus Gaspard, D-Puyallup.

Sohn said the Boeing strike is having little impact on consumer spending, and thus on tax revenue. The forecast anticipates the strike will end around the Thanksgiving holiday, based on history. Even if it went into the new year, its impact on revenue would be slight, Sohn said.

Thousands of layoffs at Boeing and Hanford over the past six years have been partly offset by gains in computer software employment, Sohn said.

Moreover, the personal income enjoyed by software workers is better on average than the income lost with the Boeing layoffs, he said.

Though new software jobs made up for only 38 percent of lost aerospace jobs over six years, software workers generated enough income to cover about 80 percent of the income lost by aerospace layoffs, Sohn said.

Sohn and Gaspard, who is leaving the Senate at year’s end, both said lawmakers wrangling over spending and other issues at the session starting in January at least will enjoy stable revenue and a huge budget surplus.

A major battle is shaping up between the Republican House and Democratic Senate and governor over how much of that surplus should be spent in the form of tax cuts and how much saved in anticipation of federal budget cuts.