State government shutdown unlikely after new revenue forecast

OLYMPIA — New economic forecasts Tuesday show that lawmakers will have $320 million more to spend over the next two years than they thought, which means the threat of a state government shutdown at the end of the month appears unlikely.

capitol1The added money is expected to break the months-long impasse between the House and Senate that has so far prevented a state budget deal.

“It’s great news,” said state Sen. Rodney Tom, D-Medina, the Senate majority leader. “Certainly I see no reason why we shouldn’t be able to come to an agreement today with that amount of revenue on the table.”

Tom said he hoped lawmakers could be out by the end of the week.

The $320 million in extra money comes from an improving economy, including a better housing market. The figure also includes $90 million in unexpected savings from reduced caseloads, including school enrollment and Medicaid recipients.

In light of Tuesday’s news, Tom said his caucus is now dropping any insistence that the Legislature pass policy reforms, including a controversial workers compensation bill.  He said the House should follow suit and drop its insistence on new taxes after Tuesday’s report.

“If you get $320 million, why do you need any more revenue?” he asked.

House Democrats were much more cautious about the new economic forecast. They stopped short of saying they would abandon their fight for more taxes in a budget deal.

“We look at the problem, not just for this biennium, but for the next two biennia as well,” said state Rep. Ross Hunter, D-Medina, chairman of the House Appropriations Committee. “We have a very, very large problem in adequately funding our education system.”

But the new revenue numbers have taken the urgency out of the Democrats’ plea for more taxes.

“It’s hard for anyone to imagine a solution to that that doesn’t involve new revenue,” said Hunter.  “You’re either going to add it now or you’re going to add it later. This defers that discussion.”

Most expect that Tuesday’s forecast will lead to a quick deal.  The unexpected $320 million seems to be what was needed to break the budget logjam.  A shutdown now seems pretty much out of the question and a formal agreement is expected in the next few days.

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