State budget shortfall expected to be $1.2 billion

OLYMPIA – Washington’s economy is going to generate $2 billion more in taxes and fees for the next state budget than it is for the current one, state lawmakers learned Wednesday.

But whether it’s enough to erase a projected billion-dollar-plus budget shortfall, satisfy a Supreme Court order to beef up public school funding, and create a reserve are questions House and Senate leaders and Gov. Jay Inslee will answer soon when they roll out their respective spending proposals.

On Wednesday, they received the last piece of data they need to complete their task: a new forecast of tax collections for the two-year budget.

And the news was better than anticipated.

Chief Economist Steve Lerch predicted the state’s general fund, which pays for much of government’s day-to-day operations, will take in $32.5 billion between July 1 and June 30, 2015. That is a bit higher than Lerch’s last forecast in November.

His report found the state is on pace to collect $30.5 billion in the budget, which runs through June 30.

“We continue to assume slow economic growth,” Lerch said. “We still see lots of uncertainty out there.”

Wednesday’s forecast brought a measure of relief to lawmakers who feared a big hit in future revenues as a result of federal spending cuts due to sequestration.

“Flat is the new up,” said Rep. Ross Hunter, D-Medina, who as chairman of the House Appropriations Committee is the chief House budget writer. “We have a hard problem to resolve. This doesn’t make it worse.”

Sen. Andy Hill, R-Redmond, who is chairman of the Senate Ways and Means Committee, said with the forecast in hand he hopes to complete his caucus’ budget proposal in “five to 10 days.”

“We can start making the hard decisions,” he said.

Inslee intends to release his blueprint next week, according to his budget director, David Schumacher.

It will lay out a path for erasing the shortfall pegged by Schumacher at between $1.2 billion and $1.3 billion. That gap represents the difference between the sum of money the state expects to collect in taxes and fees and what it will cost to continue paying for existing programs and services.

Schumacher also said the governor will propose a sizable investment in public schools — maybe in the neighborhood of $1 billion — in accordance with the Supreme Court decision in the McCleary case.

Democrats and Republicans in the Legislature are gearing up for a fight on whether the $2 billion will be enough to avert new or higher taxes, or extending taxes on beer and some professional services set to expire at the end of June.

Hunter said much of the additional revenue will be gobbled up by the shortfall and reserve. He said Wednesday, as he has often since January, that new revenue appears necessary in order to make a legitimate down payment on public school funding.

Republican senators are confident the $2 billion is enough. They oppose new taxes and want to be sure the temporary taxes expire as planned.

“We expect to keep that promise,” said Sen. Mark Schoesler, R-Ritzville, the Republican Caucus leader. “Some programs are not going to grow as much as they would like when they see the budget.”

That’s what Hill hinted at when questioned about the budget he is designing.

“In general, the goal is not to extend expiring taxes and also not to introduce new ones,” Hill said. “The goal is to live within our means.”

Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.

Talk to us

More in Local News

Photo by Kira Erickson/South Whidbey Record
Freeland resident Kevin Lungren has been commuting to the office using his paddleboard. It's a commute he can do in all seasons and just about any type of weather, except wind.
Whidbey commuter paddleboards his way to work in all seasons

The financial advisor says he’s only fallen off his board twice in the past five years.

Photo by Heather Mayhugh
Stuart Peeples demonstrates how to enter Heather Mayhugh's wheelchair van. In recent months, while navigating the new Mukilteo ferry terminal, Mayhugh has struggled to unload her clients who need access to the restroom.
People with mobility issues find new ferry terminal lacking

Some disabled folks say not enough thought went into improving the Mukilteo facility’s accessibility.

Temporary Lake Stevens Library to open this summer

The location will serve as the Sno-Isle branch until the proposed civic center campus is complete.

$500,000 available for Edmonds nonprofits

Organizations can apply for Edmonds Rescue Plan funds until Aug. 20.

Parts of Snohomish County under weekend heat advisory

Monroe and areas of the county near the Cascades were expected to see highs in the 90s.

Marysville man wins $100,000 in military vaccine lottery

Carmen S., who served in the Vietnam War, claimed his $100,000 cash prize this week.

Tirhas Tesfatsion (GoFundMe) 20210727
State AG says it can’t investigate Lynnwood Jail death

Tirhas Tesfatsion’s family pushed Lynnwood leaders for an independent inquiry. Her death was ruled a suicide.

COVID-19 case reported at crowded Lynnwood council meeting

A person who attended the Monday meeting tested positive for the coronavirus just days later.

Family and friends gather at the waters of the Skykomish River at Eagle Falls in memorial of Devin Shelby Thursday afternoon Index on July 29, 2021. Devin Shelby drowned at Eagle Falls and his body has not been recovered. (Kevin Clark / The Herald)
The Skykomish took him. His parents want him to be the last

A year ago, Devin Shelby drowned at Eagle Falls. His body was never found. His family still grieves.

Most Read