The state revenue forecast was released Thursday, Nov. 18, and the outlook is more dismal than before.
The projected deficit for the 2011-13 biennium is now $5.7 billion due to tax revenue is still sluggish. The current budget, which is through June 2011, has a $385 million deficit. Earlier this fall, Gov. Chris Gregoire asked state agencies to cut 6.3 percent of expenditures to try to help close the budget gap; those cuts are being implemented now.
Gregoire and state legislators are looking at how to make additional cuts. She warns that additional across-the-board cuts of 4.6 percent, which would be what’s needed, is unfeasible given the cuts that already happened. This means that program cuts are likely.
Her released statement is below, along with a statement from state Rep. Ed Orcutt, R-Kalama, who is a ranking member of the House Finance Committee and a member of the state Economic and Revenue Forecast Council.
OLYMPIA – Gov. Chris Gregoire today issued the following statement on today’s revenue forecast, which projects a loss of $385 million for the current biennium:
“For the past two years we have been squarely focused on navigating the effects of the great recession. Our revenues have been closely tracking to the September forecast which is why today’s news comes as such a great surprise. Further across the board cuts, which would add 4.6 percent to the 6.3 percent reductions I ordered last month, are not feasible.
“I have been working with legislative leadership in both parties to collect ideas on how to address our current shortfall. This forecast has added even more urgency to those discussions and I’ve asked them to provide their options to me by November 29. Quite frankly we can’t cut any deeper without ending significant programs. Extremely difficult choices must be made and given this sharp revenue decline, they must be made now.
“As Governor I have limited tools in how to deal with these shortfalls. With the 6.3 percent across the board cuts currently being implemented, I have already pushed that option to the limit. The Legislature will need to act quickly – delay will only deepen the problem and limit the options.”
Rep. Ed Orcutt, R-Kalama, is a member of the council and ranking member on the House Finance Committee. He says the new forecast should spur a reluctant governor and Legislature to take quick action:
“Our budgets are getting tougher, that’s for certain. But this new forecast doesn’t fundamentally change what needs to be done. We need budget solutions that work for both the short-term and the long-term. We need to enact policies that help put people back to work rather than adopting policies that place roadblocks in front of our small businesses. And we need to enact these changes sooner rather than later.
“While the governor has done what she can with recent across-the-board reductions, the Legislature is in a legal position to prioritize services and make targeted reductions and reforms that will have immediate and long-term effects. With the Legislature set to be in Olympia for Assembly Days in early December, it makes sense for the governor to call a special session in order to take advantage of early savings. The sooner we act, the less severe the reductions will be.
“The Legislature failed to take the appropriate action the last two years. Instead of prioritizing services and making necessary reductions and reforms, the Legislature balanced the budget with one-time federal dollars and with unpopular tax increases that have since been rescinded by the voters. Elected officials can’t continue to make promises for which struggling taxpayers would be required to pay. Voters want a more responsible, more streamlined government – one that lives within existing revenues.
“While I understand that the Legislature must balance this budget, Legislators must also focus on the economy itself. This budget should remind us that we’re not the only ones struggling with harsh budget realities; families across our state are confronted with their own budget crises. When we enable employers to start rehiring and get people back to work, revenue will become less of a concern for them and for us. The quicker we enact policies that get people working again, the quicker our economy will recover.”