Washington’s economy continues to mock the dismal predictions of the perennially pessimistic. While not placing myself in that category, I have regularly railed against “unsustainable state spending,” saying the 2007 Legislature virtually guaranteed tax hikes or deep program reductions in the foreseeable future. Each time, within weeks, another strong economic report would appear to repudiate my judicious jeremiad.

It happened again last Friday. ChangMook Sohn, the state’s top economist, released his forecast of state revenues: up another $282 million. As the Associated Press reported, it’s the 16th consecutive quarterly report that Sohn has adjusted upward. That’s four years of better-than-anticipated economic performance. Nonetheless, I remain concerned.

Forecasting blends art and science. Economists survey data assembled from state, national and global sources. They tweak it to reflect their unique understanding of the local economy. They feed their computers and crunch the numbers. And, in the end, they apply judgment. No one does it better than Sohn, who’s been producing the official state revenue forecasts since 1984.

The $282 million increase might look like a big number, but it’s negligible – an increase of less than 1 percent. Still, you much prefer that even negligible revisions go up rather than down. Consider the reaction had Sohn adopted the forecast based on the average view of the Governor’s Council of Economic Advisors. That alternative take on the economy would have produced a downward adjustment about $100 million. While also negligible, the shift in the trend line would have sparked spirited debate over the state’s economic and fiscal well-being and the appropriate legislative response.

In a $30 billion budget, the differences don’t amount to much. They simply underscore the fact that these are times of significant economic uncertainty.

There will be another forecast in a few months, which will reflect additional economic and revenue collection data. The November forecast will be the one on which Gov. Chris Gregoire will base her budget proposal to the 2008 Legislature. Last session, lawmakers wrote a two-year budget, which they typically modify in the second year of the biennium when they adopt what’s called the supplemental budget. That’s what they’ll be taking up in January.

Although they’ll be coming into session with more than $1 billion in unrestricted reserves and another $430 million in a hard-to-tap “rainy day” account, the recent good news doesn’t create a new license to spend.

Victor Moore, the governor’s budget director, has the right idea. “We’re not going to be starting a bunch of new programs,” he told reporters, “just dealing with emergencies and any new enrollment and caseloads.” Such adjustments are common in supplemental budgets.

I’m still not convinced that the economy is strong enough to sustain the spending increases of the last session. Remember: the adopted state budget boosted spending about 15 percent, roughly twice the 7.5 percent rate of revenue growth then predicted. With the new forecast, revenues are now expected to grow by 8.1 percent. That’s still a large chasm to bridge, even assuming lawmakers can avoid another election-year surge in state spending. A billion in the bank may prove an irresistible temptation.

It’s a matter of timing. Economists sometimes quote a Wall Street maxim: “Give them a number or give them a date, but never give them both at once.” In his forecasts, Sohn doesn’t have that kind of wiggle room. The Spokesman-Review’s Olympia correspondent, Richard Roesler, reports that Sohn calls a slowdown “inevitable,” predicting it will affect state revenues in the 2009-2011 budget cycle. It may come sooner.

Problems foreseen are problems that can be avoided. Voters can help by approving this year’s proposed constitutional amendment (ESSJR 8206) creating a rainy day fund that can only be tapped when employment drops or to address a natural disaster. Approving the amendment assures us that when the slowdown comes, the state can manage without slashing programs or raising taxes.

More important, lawmakers must bring state spending under control. Spending growth cannot long outpace revenue collections. So far, lawmakers have been lucky, not prudent. Friday’s forecast bought them a little time by increasing the budget cushion. But the long-term trend points to an entirely unnecessary budget collapse. That’s not pessimism. It’s realism.