Washington quarterly revenue projection down $167 million

For Immediate Release: June 19, 2008

OLYMPIA � The June revenue forecast for Washington state government shows projected General Fund revenue down a combined $167 million for the remainder of this biennium and the next two-year budget period.

The change in the forecast is less than one-half percent of total General Fund revenue for the two biennia.

�We continue to be in better shape economically than most other states,� Gov. Chris Gregoire said. �When the rest of the nation has economic problems, we are affected, too. The Bush administration needs to take swift action to turn around the nation�s economy through initiatives that will put people to work and lower gas prices.

�At the state level, I have taken significant steps to improve the economic security for Washington families by providing assistance to those who own a home but are in danger of foreclosure, by helping create 25,000 green collar jobs, and creating training opportunities in high-tech fields for thousands of workers.�

Dr. Steve Lerch, the state�s interim chief revenue forecaster, said that while the U.S. outlook is a little weaker since February, state business tax collections have been on target. However, real estate excise tax collections continue to be sluggish, reflecting a weak housing market.

�Washington state has a resilient economy � ranked among the best in the nation � in large part due to the wise investments we made in education, health care and public safety that give us a future that is the envy of most states,� Gregoire said. �Through these investments and the establishment of a Rainy Day Fund, we�ll keep our state moving forward.�

Overall, the U.S. economy is performing close to what was predicted in February, with the exception of oil prices, which reached a record high across the nation. The Federal Reserve appears to be devoting equal emphasis now to maintaining economic growth and containing inflation.

�Since 2005, our state has added more than 220,000 jobs. Although unemployment is up, Washington�s annual job growth is 1.3 percent, compared with 0.2 percent nationally, and Washington�s delinquent home loan rates are among the lowest in the country,� said Victor Moore, director of the state budget office.

Revenue for the current budget period, 2007�09, is projected to decrease $49.6 million, resulting in total projected revenue for the biennium of $29.4 billion. Revenue for the next budget period, 2009�11, is projected to decrease $117.3, resulting in projected total revenue of $31.8 billion.

The revised forecast leaves $359 million in unobligated General Fund revenue for 2007�09. In addition to the budget surplus, the Rainy Day Account proposed by Gregoire and passed by the voters last fall will contain $442 million in constitutionally protected reserves, placing Washington in a much better position than most states to weather the downturn. Nearly 30 states are already experiencing deficits for the current budget period.



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