September 18, 2008
Quarterly Revenue Forecast Drops Another $529 Million
The September revenue forecast for the Washington state general fund dropped a combined $529 million when the Economic and Revenue Forecast Council met this morning in Olympia. Dr. Steve Lerch, the state’s interim chief economist stated consumers have been hit hard by bad news and remain extra cautious, influencing spending and state tax collections.
Governor Gregoire immediately directed the Office of Financial Management to find an additional $200 million in savings in the current biennial budget, without affecting vital programs. This would be on top of the $90 million in savings anticipated from the recent freeze on state hiring, equipment purchases, out of state travel and personal services contracts.
The $529 million revenue drop is divided roughly equally between the current 2007-09 biennium (-$273 million) and the ensuing 2009-11 biennium (-$256 million). The revised forecast leaves $86 million in unobligated budget reserves and $442 million in the state’s “Rainy Day Fund.”