This morning the February state economic and revenue forecast was released. The forecast shows projected General Fund revenues for the current biennium up by $95.7 million compared to the prior quarterly forecast in November. However, according to state budget director Marty Brown, the real net gain is $45 million, because legislation adopted in December drove more than half of the gain.
According to the Olympian, in addition to the positive gain in revenue, “the recent caseload forecast showed lower demand for services, which is providing a larger, $330 million gain on the state’s balance sheet through June 2013.”
Interim state forecaster, Dr. Steve Lerch, did caution that the growing European economic debt crisis is cause for concern. Looking to the future Lerch predicts slow growth around 6.6% for the 2013-2015 biennium. While he cautions that Washington won’t reach pre-recession employment levels until 2014, he notes that Washington should outpace national rates. He warns, however, “while we think we are doing better than the U.S., this is still not great.”
What this means for the budget:
The slight uptick in revenue, when combined with the caseload savings, provides roughly an additional $375 million in savings for the state. Remember, revenue was down in November, so these savings bring the November shortfall down to roughly $1 billion.
During the forecast, Democratic Representative Ross Hunter, budget chair in the House, said the House will unveil their supplemental budget proposal between Monday and Wednesday of next week. Senator Ed Murray, budget chair for the Senate, said theirs would follow in the days or week following. Once both budgets have been unveiled the two chambers will begin negotiations to reconcile the two.
Whether new revenue proposals (i.e. tax measures that would go to the ballot) are still on the table, remains unknown at this point. According to Murray, a week ago he was sure his caucus would push ahead with the measure. “The recent news could change that, he said. Now it is a question.”