The state's budget reserves were essentially wiped out last week due to the release of the lastest economic forecast.
Tax revenues were down $738 million, which leaves the state with a cushion of only $163 million dollars. As happenstance has it, Governor Gregoire signed the $32 billion budget last week with the understanding that there would be a $738 million reserve/cushion. With these new numbers, the state has a "paltry" $163 million, which begs the question: What happened?
The state's top economist Arun Raha explained that the recovery is occuring slower than expected. "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," he said. (Seattle Times story is here.)
This begs another question: What's next? The next revenue forecast is in September and if it is negative again there is a real possibility of the governor calling another special session in the fall. Stay tuned.
Tax revenues were down $738 million, which leaves the state with a cushion of only $163 million dollars. As happenstance has it, Governor Gregoire signed the $32 billion budget last week with the understanding that there would be a $738 million reserve/cushion. With these new numbers, the state has a "paltry" $163 million, which begs the question: What happened?
The state's top economist Arun Raha explained that the recovery is occuring slower than expected. "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," he said. (Seattle Times story is here.)
This begs another question: What's next? The next revenue forecast is in September and if it is negative again there is a real possibility of the governor calling another special session in the fall. Stay tuned.
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