Last week, Washington’s State Economist – Dr. Arun Raha – provided revenue figures that show March actual revenues dipping below expectations.

In his report released on May 11, Dr. Raha stated that, “The job market is improving, but the unemployment rate remains stubbornly high and housing is extremely weak.” The sentiment of this statement is echoed in the observations he puts forth in the May 11 report.

• The economy recovery has appeared to have hit a road bump. High energy prices have caused growth to moderate, and uncertainty lies ahead.
• The Washington economic recovery slowed in February and March after fairly strong growth at the end of 2010 and the beginning of 2011.
• Major General Fund-State (GF-S) revenue collections for the April 11 – May 10, 2011 collection period were $157.7 million (13.3%) higher than the March forecast. The healthy collections mask a weakening economy. The entire positive variance was due to higher than anticipated one-time revenues from the recently concluded amnesty program and other one-time payments. Excluding them, revenue collections are slightly below forecast. 

In othe words, while the tax amnesty windfall makes the balance sheet look better, revenues were $32.5 million less than projected.

Dollars continue to trickle in from the amnesty program for businesses that originally was banked for $24 million and has climbed to nearly $350 million. It’s one-time money, however, and was used partially to shore up the June to July apportionment shift that helps bridge the gap in the fiscal year that ends June 30.

The next revenue forecast will be on or before June 20, and the news isn’t expected to be better – and may continue the downward trend due to high gas prices and a state economy that has remained flat.