State Relations

March 9, 2007

Budget Watch Begins

With House and Senate members virtually locked in their respective chambers passing measures with the urgency of a Wednesday March 14 5:00 p.m. deadline looming in their future, much higher education sideline speculation is focused on operating and capital budget proposals which are due to be unveiled within the next couple of weeks.

While transportation officials are understandably fixated on the outcome of Tuesday’s viaduct advisory election in Seattle, other seasoned Olympia observers are more curious about next Thursday morning’s meeting of the Economic and Revenue Forecast Council which will adopt the next quarterly forecast of state general fund revenues.  Fiscal insiders expect only a minor upturn in state revenue collections in the 2007-09 biennium which would seem of little consequence on a base of $30 billion in revenues.  But in Olympia where all budgets are won or lost on the margin, even a minor forecast change can spell gloom or doom for budget writers depending on which way the revenue needle is pointing.

Since the Governor’s budget was released in December, many legislators have expressed mild frustration that “the Governor spent all the money” and left little room in the budget for legislative priorities.  Since that time, however, state entitlement program forecasts have continued to trend downward, creating more than $100 million of additional room for legislative budget writers to address the spending priorities of their own members.  An additional $100 million or so of additional revenue in the March 15 forecast update could provide just enough budget breathing space to insure smooth negotiations between the House, Senate and Governor’s office.

The House is tentatively scheduled to release their operating and capital spending proposals the week of March 19.  The Senate should follow with their budget blueprints the week after leaving what should be ample time to negotiate a final budget in time for the April 22 adjournment deadline.