Revenue adjustment relieves ‘bit of angst’ for lawmakers

OLYMPIA – Washington might collect about $96 million more in taxes and fees over the next 17 months than previously projected. That isn’t much in a $30 billion budget. Relatively speaking, the revenue forecast is flat.

But that was still good news for Democratic legislators trying to fix a budget problem that for several years has grown every few months with each new economic forecast.

“Flat is the new awesome,” state Rep. Ross Hunter, D-Medina, the chairman of the House Ways and Means Committee, said Thursday as figures were released.

More important than the relatively tiny uptick in revenues – this quarter’s projected rise is less than last quarter’s projected drop of $143 million, state Budget Director Marty Brown noted – is a drop in the demand for state services, which helps on the other side of the general fund budget’s balance sheet. The caseload forecast projects about $330 million less in spending than Gov. Chris Gregoire assumed in November when preparing a new budget for the current fiscal period. Her budget called for cuts and a temporary tax increase to fill a growing budget gap.

“The draconian cuts seem to shrink somewhat,” said Sen. Ed Murray, D-Seattle, the chairman of the Senate Ways and Means Committee.

It’s too soon to tell how much, Murray and Hunter said. Legislators need to factor both the lower demand for some state services and the slightly higher state revenue into budgets they’ve been working on since before the session started. “It’s a cascade of numbers … You change one, all of the others change as well,” Hunter said.

Also unknown, in light of the change in projected revenue and expenses, is whether the Legislature will grant Gregoire’s request to put a sales tax increase on the ballot. Adding the $330 million drop in projected caseload demands and the extra $96 million in projected revenue creates an amount close to what the sales tax increase would have generated for the rest of the biennium.

“It’s a question,” Murray said. “A week ago, I would have said it’s not a question.”

State Rep. Ed Orcutt, R-Kalama, chairman of the Economic and Revenue Forecast Council, disagreed. A tax increase “never should have been a question in the first place,” he said.

The blip in revenue and the drop in expenses don’t solve the state’s overall problems with the way it collects money and how it spends it, members of both parties said.

“It doesn’t take away the need for structural change,” said Senate Majority Leader Lisa Brown, D-Spokane. “It does take a little bit of angst out of what people are feeling.”

House Republicans are scheduled to announce their budget proposal today. House Democrats will announce theirs early next week, and a Senate budget proposal, which could have support from members of both parties, will be announced the week after. The session is scheduled to end March 7.