There’s good news today – small, but good – from the state’s Economic and Revenue Forecast Council.
The national and state economic recovery progressed “largely as we expected in November,” the council said in a release this morning. “As a result, our revision to the forecast for the current biennium is a relatively minor $31.5 million increase in the revenue forecast.”
Output has grown for two consecutive quarters, the council said, and that includes a 5.7 percent surge in the fourth quarter of 2009. “As in November, we expect positive job growth for both the U.S. and Washington beginning in the current quarter.”
However (and isn’t there always a “however” attached to good news these days). “significant risks remain. Consumer confidence remains low, credit remains tight, and the housing recovery may falter after the home buyers credit expires. “
The report continues, “The February 2010 General Fund-State forecast for the 2009-11 biennium is $28.7 billion, which is $118.2 million less than expected in November only because of a $149.7 million reduction due to noneconomic factors … Excluding the noneconomic factors, the forecast is up by $31.5 million. This is the first forecast to extend through the 2011-13 biennium. The General Fund-State forecast for the 2011-13 biennium is $32.2 billion.”
The council is required to offer both optimistic and pessimistic alternative forecasts.
- The forecast based on more optimistic economic assumptions netted $941 million (3.3 percent) more revenue in the 2009-11 biennium and $2,487 million (7.7 percent) more revenue in the 2011-13 biennium than did the baseline forecast.
- The pessimistic alternative was $954 million (3.3 percent) lower in 2009-11 and $2,822 million (8.8 percent ) lower in 2011-13.
- An alternative forecast based on the average view of the Governor’s Council of Economic Advisors yielded $139 million (0.5 percent) more revenue in the 2009-11 biennium but $420 million (1.3 percent) less in the 2011-13 biennium.