Washington Economy Lagging the Nation in Recovery

A new Washington Research Council policy brief examines a new report from Philadelphia Fed analyzing economic recovery in the 50 states. Washington, at this stage, doesn't look so good. 

For January Washington was one of the 19 states showing a one-month decline and one of the 31 states showing a three-month decline. For one month, Washington’s decline was 0.1 percent, which ranked 36th among the 50 states. For three months, Washington’s decline was 0.6 percent, which ranked 40th among the states.

The WRC concludes:

The most important thing that state leaders can do to help the economy in the near term is to craft a solution to the 2009–11 budget gap that minimizes tax increases. 

Longer term, state leaders must confront the structural imbalance between state spending commitments and revenues. Legislators will face another multi-billion dollar budget gap when they convene next January to write a budget for 2011–13. Because the 2009–11 general fund budget relies on more than $4 billion in one-time resources (federal stimulus funds, transfers from other state accounts and reserves), it will be impossible to continue to fund in 2011–13 everything that is funded in 2009–11.

And yet, they're considering nearly a billion dollars in new taxes that will slow employment growth and delay the recovery. As the Philly Fed report demonstrates, Washington cannot take recovery or prosperity for granted. We're in a competition. And we're falling behind.