June 14, 2007
The Economic and Revenue Forecast Council met today in Olympia to adopt the most recent forecast of state general fund revenue collections. At the meeting, the Council approved the new forecast which calls for the state to collect an additional $484 million above what was predicted last March.
Dr. Chang Mook Sohn, the state’s chief economist, said that Washington’s economy continues to outperform the U.S. economy, particularly in the areas of construction and real estate. Software and aerospace are also performing well. Washington continues to show strong employment growth (2.1%) and the new jobs are predominantly in higher paying job sectors such as aerospace, computer technology, construction and professional and business services.
For the last fiscal year of the current biennium (2005-07), collections are expected to be $195 million higher. For the coming biennium (2007-09) which begins on July 1, collections are expected to be $289 million higher than anticipated last March, bringing the total forecast adjustment to $484 million.
The new forecast will result in an increase in state reserves. Unrestricted reserves will increase to $875 million for the 2007-09 biennium. The Governor and the Legislature have proposed a constitutional amendment for the November general election ballot that would deposit an additional $361 million into a “rainy day fund” for a combined total of $1.236 billion.