The June revenue forecast for Washington state was adopted in Olympia today and shows a projected decline of $167 million for the remainder of the current biennium and the upcoming biennium which begins July 1, 2009. The change in the forecast is statistically less than one-half percent of total general fund tax collections.
Dr. Steve Lerch, the interim executive director of the Economic and Revenue Forecast Council stated that while the U.S. economic outlook is weaker since the last revenue forecast in February, state business tax collections have actually been on target. Real estate excise tax collections continue to be sluggish, relfecting the overall weakness in the housing markets.
The change in the state revenue forecast breaks down as follows. In the current 2007-09 biennium, revenues are projected to decline by about $50 million, while in the ensuing 2009-11 biennium, $117 million less is expected than forecast this past February. With these forecast revisions, the state’s budget reserves drop from $851 to $801 million, with $442 of this amount in the constitutionally-protected “rainy day fund.”
The new forecast does not appreciably impact the overall budget picture for 2009-11 where a shortfall between projected revenues and projected expenditures of about $2.5 billion is expected.