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State revenue forecast is essentially flat

Post by Jordan Schrader / The News Tribune on March 20, 2013 at 12:08 pm with No Comments »
March 20, 2013 1:46 pm

State lawmakers will be relieved that their budget problem didn’t grow today.

New chief economist Steve Lerch
Chief Economist Steve Lerch

On the other hand, it didn’t shrink much either. The official shortfall, without counting court-mandated obligations to schools, stands still at just a bit more than $1.2 billion.

Today’s revenue forecast, though, is significant as the starting gun to the legislative budget process. Now Gov. Jay Inslee and lawmakers will start putting out their budget plans.

State forecasters raised their expectations by $59 million for revenue in the current budget period through June 30, but decreased it by $19 million for the next two-year period. They also lowered their sights, by $48.7 million, for the 2015-2017 period that lawmakers must also keep in balance.

“We have a hard problem to resolve. This doesn’t make it worse,” said House Budget Chairman Ross Hunter, a Democrat.

“The nice thing now is we can start making hard decisions,” said Senate Budget Chairman Andy Hill, a Republican.

State revenue is expected to grow by 6.6 percent or about $2 billion from the current budget period to the next, giving lawmakers $32.5 billion to work with in the budget they are now writing.

Hill expects the Senate majority coalition to release its budget within five to 10 days, which he said would not include new or extended taxes. Hunter said his Democratic caucus would follow suit the following week, but he doesn’t see a way forward without new revenue. Inslee’s budget director said the governor would release updates to his predecessor’s plan around the end of next week that includes new spending on public schools and how to pay for it.

“We continue to worry about the same things we’ve been worried about,” state economist Steve Lerch said. Those include consumer confidence; European debt crises headlined by Cyprus turmoil; and Washington, D.C., budget troubles headlined by the upcoming sequester cuts, which they assume will last through June 30.

But there are bright spots, including an improving housing market.

Here are all the details.

This post is being updated as we get more information.

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