Spokane7
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February 16, 2012 in City
Relatively rosy state budget forecast expected
Decreased demand may shrink gap lawmakers must close
OLYMPIA – Washington might get the most optimistic budget outlook in years today 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.
The caseload forecast, which measures costs of state programs ranging from students in public schools to families receiving assistance and medical care, could be down by as much as $340 million for the fiscal cycle that ends in June 2013. That demand is tied partly to the economy but also to demographic factors, such as how many school-age children live in the state.
Earlier this week, Gov. Chris Gregoire said she expected today’s revenue forecast for the coming 17 months would be “flat” – neither up nor down from the November figures. After several years of declining revenue as the state struggled with the recession, Gregoire called that a win: “It’s the new happy to be flat.”
Declining revenue forecasts last September and November prompted her to propose some $2 billion in cuts in an effort to close the gap between expected tax collections and projected expenses and leave a cushion for any further drops in revenue. She also suggested a temporary sales tax increase to “buy back” some of the worst budget cuts she was proposing for public schools, colleges, social programs and public safety.
Although Gregoire also asked legislators to move quickly to close the budget gap, final budgets by the House and Senate have been waiting on today’s economic forecast.
On Wednesday, leading Republicans said they believe that forecast may project revenue growing by as much as $200 million over the rest of the biennium. Combined with the drop in demand for state programs, that would be a shift of as much as $540 million.
“It looks like a gift,” said Senate Minority Leader Mike Hewitt, R-Walla Walla. “It does not fix the structural problems going forward.”
Republicans have called for major reforms in growing state programs in exchange for supporting budget plans proposed by Democrats. With pressure easing on the budget, Hewitt and House Minority Leader Richard DeBolt, R-Chehalis, said there may be an urge to muddle through with small changes rather than accept major reforms that cut expenses in the future.
There may be another $18 million bump to the budget in the offing: Republicans and Democrats may have reached a deal on eliminating a tax exemption that five large banks receive for making first mortgages in Washington.
Rep. Kevin Parker, R-Spokane, said recent studies indicate neither the state nor first-time homebuyers see the expected benefit from that tax exemption for those five banks, although there is a benefit for mortgages from smaller community banks. Parker will work with Rep. Reuven Carlyle, D-Seattle, on a bill to drop the exemption for five of the nation’s largest banks: Wells Fargo, Key, Citibank, Chase and Bank of America.
Eliminating a tax exemption requires bipartisan support, because like a tax increase it requires a two-thirds majority in both chambers.
Supermajority for taxes unconstitutional, judge rules 
DHF on February 16 at 5:51 a.m.
WOW The Lib Democrats in Olympia should love that news . Now they can start spending all over to drive the taxpayer further to the poor house.
JBlim on February 16 at 6:49 a.m.
Yep, your problems are all the government’s fault.
WHS on February 16 at 6:59 a.m.
This is a welcome change and good news, for everyone!
Of course, the negative party will certainly find reasons to continue their campaign of whining, complaining, blaming and finger pointing… That’s what they do best.
WHS
Local on February 16 at 7:45 a.m.
“She also suggested a temporary sales tax increase to “buy back” some of the worst budget cuts..”
So the budget isn’t balanced and she wants to raise taxes to increase spending. Wow, she just doesn’t get it. Stop spending money you don’t have.
IHike4Fun on February 16 at 8:24 a.m.
I thought they were still 2 billion off?
WHS on February 16 at 9:18 a.m.
Reading comprehension is defined as the level of understanding of a text. This understanding comes from the interaction between the words that are written and how they trigger knowledge outside the text.
Many educators in the USA believe that students need to learn to analyze text (comprehend it) even before they can read it on their own, and comprehension instruction generally begins in pre-Kindergarten or Kindergarten.
I really have to agree with this…. As some posters on this site really make wonder.
WHS
johnclarke on February 16 at 9:36 a.m.
“She also suggested a temporary sales tax increase to “buy back” some of the worst budget cuts she was proposing for public schools, colleges, social programs and public safety.”
So….everyone gets that this didn’t happen right? Note the word
“suggested.”
Now is the time to end the tax breaks for banks, and oh gee what about Boeing? This company has been given enough and they are enjoying new orders that will be a huge windfall. Time to end welfare for corporations. Now.
I’m not getting any breaks.
terrymr on February 16 at 9:59 a.m.
What’s wrong with people that we have politicians worried that we might get “good economic news” ?
pmbrown49 on February 16 at 10:46 a.m.
JC, I think the state sold us down the river several years by guaranteeing Boeing tax breaks for many years if they “assembled” (not built with US manufactured parts) the 787 in Everett.
But I agree with you…Boeing has a healthy outlook for several years and doesn’t need the tax breaks.