State’s revenue estimate better than expected
OLYMPIA — The state`s latest revenue estimate came in Wednesday $40 million better than expected for the next two years.
It`s a forecast that the governor and legislators have been waiting for before they draft their respective budgets during the final month of the legislative session.
The revenue projection was welcome news for lawmakers who had expected the number to be negative, not positive. But $40 million is still a drop in the bucket when the overall two-year budget will top $33 billion.
The budget writers from both sides of the aisle reacted to the new numbers.
“I`m very excited about the outcome,” state Rep. Gary Alexander, R-Olympia, said. “I believe it is a responsible and realistic forecast, and I will get back with my team and prepare the rest of my budget accordingly.”
But state Rep. Ross Hunter, D-Medina, said, “The fact that it didn`t go down by a quarter of a billion, yeah, I`m real happy about that, but it`s still a very difficult problem. “
In presenting Wednesday’s forecast, the state`s chief economist, Steve Lerch, explained the primary reason behind the small bit of good news.
“The improvement in the forecast is around the housing market,” he said. “We see a little bit higher forecast for housing permits. That`s a real positive cause it drives both jobs and revenue.”
Also helping the economy is robust car sales. The news, however, would have been better without the economic drag due to the federal payroll tax increase and sequestration.
“We continue to worry about what`s going on in the other Washington,” Lerch said.
Factoring in the new forecast, the state now faces a $1.25 billion hole in the upcoming budget and a mandate to add $1 billion more to public schools. A showdown is clearly brewing about how those challenges will be met.
“I`m more convinced than ever that we can balance this budget without new tax revenue,” Alexander said.
“We`ve made all the reductions in the last four years that you can make,” Hunter said. “I`m guessing that the voters would like to do a balanced solution. It`s what they always say when you poll them on it.”
The revenue forecast was the final piece of information that was needed before budget writers complete their spending blueprints. Democrats and Republicans will come out with separate detailed plans in the next few weeks.