State Budget Deficit Forecast Upped $1.2 Billion to $5.7 Billion

Dr. Arun Raha

When I arrived this afternoon to interview Remy Trupin, executive director of the Washington State Budget & Policy Center, about the nuts-and-bolts of state budget allocation, he was still shellshocked from this morning's state revenue forecast.

The short story is that the projected deficit for the 2009-2011 and 2011-13 budget cycles has grown by $1.2 billion, to $5.7 billion, since September's forecast. The Hopper (the Senate Democrats blog) live-blogged the announcement, and that's where the following quotes come from:

Revenue for the remainder of the current budget cycle is projected to fall by $385 million to $28 billion. Revenue for the next cycle is projected to fall by $809 million to $33 billion.

"I would conclude that our forecast in September was more optimistic than it needed to be," said state chief economist Arun Raha, a qualification that should be immediately registered in a collection of classic understatements. Almost $300 million of the shortfall comes from the passage of I-1107, which rolled back taxes on bottled water, soda, and candy. 

To balance the budget for the current budget cycle with cuts, the budget would need to be reduced by almost eleven percent across the board. To meet this year's shortfall, said Marty Brown, director of the state's Office of Financial Management, "We're going to be talking about Basic Health soon, Disability Lifeline soon, levy equalization. School districts are going to get nailed." 

Governor Gregoire

In a statement on the widening revenue gap, Governor Gregoire said: "Further across the board cuts, which would add 4.6 percent to the 6.3 percent reductions I ordered last month, are not feasible." Saying that she'd given legislative leadership until November 29 to return to her with "options," Gregoire fell short of calling for a special legislative session: "The Legislature will need to act quickly--delay will only deepen the problem and limit the options."

"It's a dangerous spiral," the Budget & Policy Center's Trupin told me, referring to attempts to solve revenue shortages by budget cuts alone. But the state's operating budget doesn't offer much leeway. He predicted health and human services would be once again placed on the chopping block, while higher education tuition rates would see another increase. (The UW's $250-million renovation of Husky Stadium, though it would use no public funds, seems an odd priority when the temporary playfield could just as well become a permanent one.)