On Friday the Washington Caseload Forecast Council released the March caseload forecast report but did not adopt the report due to a lack of a quorum. The forecast shows a reduction of $287 million in the cost of government through June 2013.

The forecast in effect  shows a reduction of $78 million to the state from costs for public schools, Medicaid, prisons and other programs through June and an additional $207 million for the next two-year budget cycle.

The reason for the reduction in costs is primarily federal health care reform. Reduced use of state-paid medical services by those on the case rolls is driving down the costs, accounting for $70 million of the avoided costs in the short term and about $117 million in the next cycle. 

In other news, the Economic and Revenue Forecast Council released its monthly tax collections report Friday, saying they are down by a cumulative $85 million through early March, compared with the November forecast.

The collections for the state general fund fell $39.9 million below the previous forecast over the past month alone. But the state’s economy is growing, and tax collections overall still are higher than in the previous year.

The revenue council makes its next quarterly report Thursday. Dr. Arun Raha will offer the latest revenue forecast on March 17 at noon in Olympia to legislative members of the Economic and Revenue Forecast Council. The announcement is expected to be carried live on TVW. 

Some legislators fear revenue could fall as much as $2 billion from November’s predictions. “Optimistic” projections pegged the revenue shortfall at $500 million more than originally projected. Lawmakers are expressing concerns that it will be even larger, which will make closing the current projected gap of $4.6 billion for the 2011-13 biennium even greater.

State revenue is tied in a major way to sales and business activity, and sales are linked to consumers’ sense of job security or job prospects. But the quarterly economic forecast issued a week ago said the state still is 180,000 jobs below the pre-recession peak, and full job recovery won’t occur until after the next biennium ends June 30, 2013.

About all that legislative leaders have agreed on at this point is to first try writing a budget without tax increases.