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State’s new deficit projection: $5.7 billion

Governor says she might call special session of Legislature

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By Jerry Cornfield
Herald Writer
OLYMPIA — Tax collections are falling, the state’s budget deficit is rising and state lawmakers may be forced to hold a special session to deal with it all.
On Thursday, the state’s chief economist predicted the state will collect $1.2 billion less in tax revenues through mid-2013, punching a big hole in the current budget and a gaping one in the next.
Most of that predicted drop is because of a slower-than-hoped recovery of the economy, said economist Arun Raha, executive director of the Economic and Revenue Forecast Council. About a quarter of the total is the stream of revenues wiped out by voters when they passed Initiative 1107 to repeal taxes on candy, gum, bottled water and soda pop.
“We are in a deep hole and coming out really slowly,” Raha said at Thursday’s meeting of the forecast council. “Things will eventually get better. That cannot be reassuring but that is the best I have at this time.”
His report means immediate trouble for the deficit-plagued budget that runs through June 30.
Gov. Chris Gregoire ordered across-the-board cuts last month to erase a $520 million shortfall. Now, she and legislators will have to trim another $385 million in spending.
Looking ahead, Raha’s forecast envisions $810 million less in tax dollars for the 2011-13 biennium, pushing the projected shortfall in that budget to a whopping $5.7 billion.
With all this red ink, Gregoire has pressed legislative leaders of both political parties to send her, by Nov. 29, suggestions of what to pare or ax.
In the past, she’s been willing to call an emergency session of the Legislature if it seemed certain lawmakers would arrive and act swiftly in approving budget changes.
“Quite frankly, we can’t cut any deeper without ending significant programs,” she said in a statement. “Extremely difficult choices must be made and given this sharp revenue decline, they must be made now. The Legislature will need to act quickly — delay will only deepen the problem and limit the options.”
If she ordered a special session, it would likely start when lawmakers are scheduled to be in Olympia for committee meetings beginning Dec. 6.
Republican leaders have been calling for a special session for months.
“If it wasn’t clear before today that the Legislature needs to respond quickly, with a short special session to get going on spending reductions, it ought to be now,” said Sen. Joe Zarelli, R-Ridgefield, who serves on the forecast council and is the ranking Republican on Senate Ways and Means Committee. “If anyone is still opposed to the idea of a special session, tell me: How much deeper does the budget hole have to get?”
Democrats, who hold the majority in both chambers, have not embraced the idea, though a statement from some party leaders Thursday may signal a possible change in attitude.
“Today’s forecast showing an additional $385 million loss in revenue in this biennium is extremely serious,” begins the joint statement from Senate Majority Leader Lisa Brown, D-Spokane, and Sen. Ed Murray, D-Seattle.
“We are working with our members on a list of proposals to help close this gap. It’s our understanding that the other caucuses and Gov. Gregoire are doing the same,” they said. “When we reach agreement on a way forward, we believe the Legislature should — and will — act immediately.”
Concerns about cuts now and in the future spurred a daylong informational picket by prison workers outside Monroe Correctional Complex on Wednesday.
It also brought dozens of people to the Capitol on Wednesday evening to protest planned trimming of services to children and adults with disabilities.
Corinna Fale of Everett, who has cerebral palsy and is in a wheelchair, was one of those attending. She said she and her husband, who also has cerebral palsy, rely on workers provided through a state program to get in and out of bed.
“This is going to be really, really bad,” she said. “I wouldn’t be able to get out of bed. I wouldn’t be able to go to work. I wouldn’t be able to do the normal everyday kind of things I now can do.”
Jerry Cornfield: 360-352-8623;
Story tags » Economy, Business & FinanceState

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