OLYMPIA – Another crushing drop in expected revenues has pushed the state’s projected budget shortfall to nearly $2.6 billion, the governor’s office reported today following release of a new economic forecast..
Monthly collections of tax revenues continue to fall well below estimates and receipts are now predicted to be $760 million less than what the state’s chief forecaster Arun Raha predicted in his September analysis.
As the state’s income is less than anticipated, its expenses are climbing due to rising numbers of students, prisoners and people seeking government supported services.
For Gov. Chris Gregoire, today’s figures represents the predicted shortfall in the current budget that runs through mid-2011. Next month, she’ll propose a supplemental budget for 2010 on how she wants to fill the hole.
Budget gap: See a graphic that shows the magnitude of the hole at $2 billion from today’s front page of The Herald.
By law, Gregoire’s plan must be balanced without the use of new revenue from tax or fee increases. She’s expected to propose a combination of spending cuts, transfers from other accounts into the general fund used to pay services and tap into the emergency reserves.
A year ago, Gregoire faced a projected gap of $6 billion between the amount of incoming revenues and the costs of maintaining government services plus paying for new programs and pay hikes.
It grew to $9 billion by this spring. Gregoire and the Democrat-controlled Legislature eventually balanced the bottom line by using federal stimulus money, transfers within the budget and $3.3 billion in cuts.
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