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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Washington state economist offers mixed revenue outlook

OLYMPIA – Washington’s projected tax revenues look slightly better than they did four months ago, but won’t add enough money to cover some of the state’s expected expenses in the coming years.

State Economist Steve Lerch delivered a forecast Tuesday with both good and bad news:

• More people have jobs yet full-time work is decreasing while part-time jobs are increasing.

• Consumer confidence is up, but not back to pre-recession levels.

• Manufacturing levels are expanding in Washington faster than the rest of the country, but oil prices are up a bit and could go much higher with increased turmoil in the Middle East.

In terms of dollars, “the good news is pretty small,” Lerch said.

When the pluses and minuses were plugged into economic models, he said the state’s general fund – the pot of money that covers the most programs and salaries not connected with transportation or construction – should be about $157 million higher than previously forecast by the end of next June. It should be about $238 million higher than the 2015-17 budget cycle that Lerch and his office forecast in February.

Considering the state’s projected budget is about $16.5 billion for the next 12 months and about $36 billion for the two years after that, those are relatively small increases.

Meanwhile, the state could be facing more students in public schools, a court order to spend an extra $4.5 billion over the next five years on education, more inmates in prisons, higher pension costs and the possibility of the first cost-of-living adjustment for state employees in years.

David Schumacher, director of the Office of Management and Budget, said Gov. Jay Inslee has ordered state agencies to submit plans for budget reductions of up to 15 percent. Inslee isn’t expecting to cut 15 percent across the board, but looking at options as a way to determine “where the pain will be the least,” Schumacher said.