It’s entirely due to the recently approved $800 million tax package, but the new state revenue forecast is finally showing some positive numbers. The new report today from the state Economic and Revenue Forecast Council shows revenue growth of $558 million during the next fiscal year and an additional $1.9 billion in following 2011-13 biennium.
Arun Raha, the council director and the state’s chief economist, told the bipartisan panel of legislators and administration officials that the state and national recovery continues to be “slow and uneven.” Job growth is very slow and construction remains in the tank, but aerospace, trade, software and other sectors are doing nicely, he said.
The dramatic new additions to the projected bottom line for tax collections is due to the tax package approved by the 2010 Legislature, and not because the economy is suddenly doing significantly better, Raha emphasized. He actually subtracted $207 million from his forecast due to “a somewhat weaker near-term economic outlook” than he had presumed in the February forecast. That doesn’t leave much of an ending fund balance.
Governor Gregoire and the Legislature have been preparing for a sizable deficit in the next budget cycle. The governor also has warned of a big hole in the current budget if Congress doesn’t extend Medicaid payments to the states.