The state revenue forecast is out, and it’s not good news.
The state is facing an estimated $1.3 billion shortfall for the current budget cycle. Gov. Chris Gregoire has asked state agencies to outline what budget cuts of 5 and 10 percent would look like.
This doesn’t mean cuts are necessarily happening, but school districts, colleges and universities could take another hit in coming months. This is something many in the education world were expecting.
The following story is from the Herald Wire Services.
OLYMPIA, Wash. Washington faces a $1.3 billion shortfall for the current two-year budget cycle, forcing lawmakers to consider a fresh round of cuts.
“Fear and uncertainty have overwhelmed consumer and business behavior,” said state revenue forecaster Arun Raha in his announcement. He also said the global debt crisis and a partisan congressional meltdown over raising the U.S. government debt limit.
Gov. Chris Gregoire’s budget director has already asked state agencies to prepare lists of cuts at the 5 percent and 10 percent levels – worth $1.7 billion in the worst-case scenario – by Tuesday.
Lawmakers said Thursday they are already discussing new ways to address the shortfall, just months after finalizing a plan to make $4.6 billion in projected spending reductions.
Gregoire is considering the possibility of asking the Legislature to come back soon to start balancing the budget before lawmakers are scheduled come back in January.
Republicans budget writers still say tax increases are still not acceptable, and they can block any such proposals because of a voter-approved initiative that requires a two-thirds majority to pass them. Democrats are considering a proposal that would ask voters to approve taxes in order to support education, which has faced much of the cuts.
Raha says job growth in Washington should outpace the nation’s rate, but he is lowering his estimates through 2013 – saying the state won’t recover all of the roughly 200,000 jobs lost in the recession until 2013.
He said job growth for the rest of the year will be 1.1 percent, compared to his estimate of 1.2 percent in June. Similarly, job growth will be 1.4 percent in 2012 and 2.1 percent in 2013, down from a 2.2 percent forecast before.
Revenue growth estimates also are shrunken – from 4.6 percent in the budget year ending next June to 1.4 percent, and from 7 percent in the year ending June 2013 to 4.5 percent.
“I’d like to assure you this nightmare will end. But I don’t see an end in sight,” Raha said.