The state expects to collect slightly more revenue at the close of the current budget cycle, according to the latest forecast from the state's top economist, which predicts the state will bring in $59 million more in revenues during this biennium. However, looking forward to the 2013-2015 biennium (the one legislators are about the begin budgeting), the forecast calls for about $19 million less—or around $32.5 billion—if the state doesn't make any changes to the tax code.

In the simplest terms: With the $59 million extra closing out this biennium and the $19 million less moving forward, the state has $40 million extra; not a major cash infusion (a wash according to legislators) when they're facing a $900 million to $1.3 billion shortfall (plus $300 million in unanticipated caseloads). The legislature also needs an extra $1.4 billion approximately to meet the state Supreme Court's K-12 basic education funding mandate.

"This forecast takes a bad problem and doesn't make it worse," said Rep. Ross Hunter (D-48, Medina), the House's lead budget writer. Hunter also quipped that "flat is the new up" when it comes to forecasts.

Steve Lerch, executive director of the nonpartisan Economic and Revenue Forecast Council, said this afternoon that strong auto and housing sales drove the bump in the forecast.

Democratic Rep. Hunter said that he doesn't see a way to increasing funding for education without raising revenue.

But the slight increase in revenue doesn't mean the state's budget woes are over. "The biggest problem will be managing everyone's expectations," said Sen. Jim Hargrove (D-24, Hoquiam).

Without factoring in the state Supreme Court's McCleary decision, which compels the state to spend more on K-12 education, and other factors, the legislature already has a $1.3 billion-or-so gap, budget writers from the House and Senate said. Today's news tweaks that favorably, but only slightly.

Rep. Hunter said that he doesn't see a way to increasing funding for education without raising revenue.

"There's really no correlation between increased spending and outcomes. The important thing is when you're putting money in, you're targeting it."—Republican Sen. Andy Hill.But Sen. Andy Hill (R-45, Redmond), the Senate's lead budget writer, instead emphasized a theme of the Majority Coalition Caucus (the Republican-dominated Senate majority) this session: "We've got hard data that shows there's really no correlation between increased spending and outcomes. The important thing is when you're putting money in, you're targeting it." The MCC has said they will increase funding for education, but not without reforms.

Aside from strong home and auto sales, Lerch said the forecast shows sales tax and business and occupation tax receipts were up in the fourth quarter of 2012.

On the flip side, consumer confidence is still low. The other so-so economic news: Exports are strong until you take aerospace and transportation out of the equation. “There’s very little growth once we take away those,” Lerch says.