The state economic and revenue forecast council met in Olympia this morning to adopt the most recent forecast of state general fund revenues. The new forecast shows projected tax collections down $238 million for the remainder of the 2009-11 biennium.
Dr. Arun Raha, the state’s chief forecaster, indicated that the state’s economy has likely bottomed out and will soon be on the mend. Because consumers continue to pay down debt and are guarded about spending for large ticket items (houses, cars, etc.) Washington State’s recovery will take more time than the rest of the nation.
Coupled with the decline in state revenues forecast in June, the September revenue forecast puts the state’s budget balance sheet in a $185 million negative position (even when including the use of the $245 million budget stabilization account balance). Together with mandatory supplemental spending needs and the need to rebuild the state’s budget reserves, a number of Olympia budget officials have alluded to a 2010 supplemental budget “problem” of about $1 billion.
Governor Gregoire stated today that she will be preparing a supplemental budget for the next legislative session that accounts for the revenue shortfalls which have occured since the Legislature adjourned last spring and stated that additional spending cuts would be needed to bring the budget back into balance.