The state budget shortfall is roughly unchanged after new projections. Forecasters are slightly downgrading their expectations for state revenue through mid-2015 (by $80 million), but officials said savings in state programs such as Medicaid more than outweigh the reduction.
The bottom line: An expected $900 million hole in the next two-year, $33.8 billion budget.
But those numbers are misleading because they don’t include court-mandated obligations to schools. Depending on who you ask, those demand somewhere between $1 billion and $4 billion in the next budget period.
House budget chairman Ross Hunter figures when you add those school obligations (perhaps $1.9 billion, he said, depending on what assumptions are made), and include a fund balance as a cushion, the real budget shortfall will reach $3 billion to $3.5 billion.
Democrat Hunter said a “levy swap” that involves raising the state property tax and lowering local levies could cut the problem in half. But it would be a tax increase on some property owners, so some legislators are wary and Democratic Gov.-elect Jay Inslee campaigned against a version of the swap supported by his Republican opponent, Rob McKenna.
By the way, budgeters are not counting on any money from voters’ decision to legalize and tax marijuana. The state budget office thinks Initiative 502 could bring in as much as $800 million in extra state revenue in the next budget period, but says there are too many uncertainties to count on the money — particularly because pot remains illegal under federal law.