State general fund revenue collections are projected to drop another $760 million in the current biennium based on the new forecast of tax collections adopted by the Economic and Revenue Forecast Council in Olympia just minutes ago.
According to the Office of Financial Management OFM), the projected budget deficit facing the Governor and state legislature as they craft the 2010 supplemental budget is expected to be $2.6 billion. The cumulative budget shortfall for the biennium is now $11.6 billion — almost a third of the current biennial budget according to OFM.
Dr. Arun Raha, the state’s chief revenue forecaster, said that while the economy is improving, much of the impetus has come from spending by the federal government rather than consumer spending. Today’s forecast adjustment is a reflection of a revised estimate of when Washingtonians will regain the confidence to spend on goods and services that are subject to state taxes.
The Governor’s 2010 supplemental budget proposal is expected to be released in early December. By law, she is required to submit a balanced budget within available revenues. The Governor did indicate today that all options are now on the table.