This Washington
Afternoon Jolt: The State Budget
We've got an obvious loser today: The State Budget.
Dr. Arun Raha, executive director of the state's Economic and Revenue Forecast Council, delivered the bad news today: The state is going to collect $572 million less in revenue through 2013 than anticipated. Overall, $185 million less came in during the last three months of this quarter than the state expected, and Raha expects $387 million less in revenues over the next two years.
That puts the state budget about $85 million in the red for the end of the current 2009-11 biennium (which ends on July 1). We're in the red because the $185 million drop in projected revenue bites into the $100 million ending fund balance the budget banked on. $100 million minus $185 million—well, you do the math.
We're also down $328 million for the 2011-13 biennium, putting the ending fund balance for the next biennium at $163 million instead of the $738 million that was anticipated in the 2011-2013 budget that Gov. Chris Gregoire signed yesterday. [pullquote]Washington employment grew less than expected in the three months since the March forecast was released ... construction remains in a prolonged slump.[/pullquote]
Check out the executive summary on pages three, four, and five in Raha's report. But it's familiar stuff. Starting off this way:
The report goes on to cite lousy specifics in Washington State: A weak housing sector; weak construction employment; high energy costs plus inflation; more foreclosures; and slow growth in overall employment.
Dr. Arun Raha, executive director of the state's Economic and Revenue Forecast Council, delivered the bad news today: The state is going to collect $572 million less in revenue through 2013 than anticipated. Overall, $185 million less came in during the last three months of this quarter than the state expected, and Raha expects $387 million less in revenues over the next two years.
That puts the state budget about $85 million in the red for the end of the current 2009-11 biennium (which ends on July 1). We're in the red because the $185 million drop in projected revenue bites into the $100 million ending fund balance the budget banked on. $100 million minus $185 million—well, you do the math.
We're also down $328 million for the 2011-13 biennium, putting the ending fund balance for the next biennium at $163 million instead of the $738 million that was anticipated in the 2011-2013 budget that Gov. Chris Gregoire signed yesterday. [pullquote]Washington employment grew less than expected in the three months since the March forecast was released ... construction remains in a prolonged slump.[/pullquote]
Check out the executive summary on pages three, four, and five in Raha's report. But it's familiar stuff. Starting off this way:
The U.S. economy has entered another soft-patch in a recovery that is proving to be far more bumpy and fragile than usual. While growth continues, it does so at a slower rate than before. Dual headwinds of sustained high gas prices and disruptions to the manufacturing supply chain due to power shortages in Japan have taken the wind out of the sails of the recovery.
The report goes on to cite lousy specifics in Washington State: A weak housing sector; weak construction employment; high energy costs plus inflation; more foreclosures; and slow growth in overall employment.
Washington employment grew less than expected in the three months since the March forecast was released. The economy added 8,400 net new jobs in March and April. There was no job growth in May. Over the three months, we had expected 14,800 jobs in our March forecast. Aerospace and software are expanding, but construction remains in a prolonged slump.
