Spending cutbacks hit state hard, policy adviser tells Marysville chamber members
Published 8:01 pm Friday, April 24, 2009
MARYSVILLE — There’s no way of telling when our recession will hit bottom, but it’s already lasted nearly as long as the terrible bear market of 1973-74 and has fallen harder than in 2000-02.
That was the assessment of Al Ralston, president of the Washington Research Council, who addressed the Greater Marysville Tulalip Chamber of Commerce on Friday.
“People have learned their lesson from the previous recessions and are holding onto their money,” Ralston said. “A lot of people are putting their money under the mattress.”
The sharp spending cutbacks by consumers have hurt the state’s economy, Ralston noted, adding that they make it harder to predict when the economy will help regenerate itself.
He said retail sales in Washington state have plummeted, making it extremely difficult for the Legislature to set realistic budgets. He noted that retail sales tax for the state dropped nearly 12 percent during the last three months of 2008.
Tax revenues fell in virtually all categories, with the worst being motor vehicles and parts. Tax revenue in January for the vehicle category dropped 29 percent in comparison to the previous year, the worst showing. Revenue for home furnishings, building materials and convenience stores all fell around 20 percent.
Typically, he noted, Washington state has five areas of economic strength — aerospace, software, business services, construction and agriculture.
“Construction was one of the keys to getting over the last recession,” he said. “It was very, very strong until recently, then it it’s really just dropped off.”
Boeing employment has also fallen, with plans for continued cutbacks.
Ralston noted that we’re not building many new homes these days, but other construction projects could pick up as various federal economic stimulus projects get underway.
