Another $482 Million Sliced from State Revenue Forecast

It could have been worse. With monthly collections coming in below expectations since the March forecast, some reduction this morning was inevitable. And Arun Raha clearly believes things are going to get better. The press release accompanying today's meeting led with the positive:

It increasingly appears that we are finally approaching the end of this “Great Recession.”

The release goes on to say that "the bottom will be lower" than expected and the recovery will be slower.

Raha then cuts $185 million in anticipated revenues for ths 2007-2009 biennium, which has 12 days left in it, For the coming 2009-2011 biennium, he cuts $297 million. It would have been a reduction of $523 million but for the inclusion of $226 million in new revenues stemming from legislative tax and fee hikes.

You can download the 45-page report, with a wealth of supporting data and charts) here.

Rich Roesler reports that the governor is ordering cabinet-level agencies to cut 2 percent from their budgets. 

In the Olympian, Brad Shannon writes:

The downturn appears small enough that Gov. Chris Gregoire can deal with it using reserves and orders to agencies to trim expenses, rather than call a special session of the Legislature.

In Olympia Business Watch yesterday, Jason Hagey wrote that state representatives Kelly Linville, D-Bellingham, and Gary Alexander, R-Olympia, agreed that there was no need for a special session to address the budget. Today, Alexander released a statement, saying in part:

The governor has the authority and ability to make across-the-board reductions in her cabinet agencies, and she should exercise this option.

We cannot let this forecast lead us down the road to tax increases.

TVW's Capitol Record blog has Raha's comments on consumer spending, the "wild card" in the forecast. He points out that although income levels are rising, consumers still are not spending, hence state revenues are lagging income growth. He thinks that will eventually turn around.

“People will be entering this holiday sales season with pent up demand, money in the bank and a more optimistic outlook about the future,” he said, “if our prediction about the trough in the third quarter is true.”

But, he said, “This is the biggest wild card in our forecast.”

The balance sheet now shows 2009-2011 ending with a negative general fund balance of $194.5 million.

According to Adam Wilson's blog in the Olympian ,

That means more cuts to agencies, says Budget Chief Victor Moore. He said the governor's office thinks it can cut $200 million to $250 million more through program reductions, efficiencies and staffing.

Much more on this to come.

It increasingly appears that we are finally approaching the end of this “Great Recession.”

The release goes on to say that "the bottom will be lower" than expected and the recovery will be slower.

Raha then cuts $185 million in anticipated revenues for ths 2007-2009 biennium, which has 12 days left in it, For the coming 2009-2011 biennium, he cuts $297 million. It would have been a reduction of $523 million but for the inclusion of $226 million in new revenues stemming from legislative tax and fee hikes.

You can download the 45-page report, with a wealth of supporting data and charts) here.

Rich Roesler reports that the governor is ordering cabinet-level agencies to cut 2 percent from their budgets. 

In the Olympian, Brad Shannon writes:

The downturn appears small enough that Gov. Chris Gregoire can deal with it using reserves and orders to agencies to trim expenses, rather than call a special session of the Legislature.

In Olympia Business Watch yesterday, Jason Hagey wrote that state representatives Kelly Linville, D-Bellingham, and Gary Alexander, R-Olympia, agreed that there was no need for a special session to address the budget. Today, Alexander released a statement, saying in part:

The governor has the authority and ability to make across-the-board reductions in her cabinet agencies, and she should exercise this option.

We cannot let this forecast lead us down the road to tax increases.

TVW's Capitol Record blog has Raha's comments on consumer spending, the "wild card" in the forecast. He points out that although income levels are rising, consumers still are not spending, hence state revenues are lagging income growth. He thinks that will eventually turn around.

“People will be entering this holiday sales season with pent up demand, money in the bank and a more optimistic outlook about the future,” he said, “if our prediction about the trough in the third quarter is true.”

But, he said, “This is the biggest wild card in our forecast.”

The balance sheet now shows 2009-2011 ending with a negative general fund balance of $194.5 million.

According to Adam Wilson's blog in the Olympian ,

That means more cuts to agencies, says Budget Chief Victor Moore. He said the governor's office thinks it can cut $200 million to $250 million more through program reductions, efficiencies and staffing.

Much more on this to come.