Washington State Forecasts $1.4 Billion Revenue Deficit

Washington State Gov. Christine Gregoire called for a special legislative session to begin Nov. 28, to address the $1.4 billion deficit forecast for 2011–2013.

Gregoire decided on the special session one week after state chief economist, Arun Raha, reduced the revenue forecast by $1.4 billion, according to a press release from the governor’s office. Usually, the legislative session does not begin until January.

A “weak job economic outlook” is the biggest factor in the decision to lower the forecast of state revenue, said Raha.

Only 50,000 jobs have been added to the state’s economy since Febuary 2010, according to the “Economic and Revenue Update,” for September published by the Economic and Revenue Forecast Council.

Most of Washington’s revenue comes from sales taxes, but when people are out of work the tendency is to conserve money, to buy less. The fragile state of the world economy is also playing a role in people’s decision making.

“Europe and D.C. have had an impact on people’s confidence in the economy and the recession has continually held the Washington economy back,” said Scott Whiteaker, spokesperson for the governor’s office.

With less revenue to draw upon, cuts in spending are the state’s next step. Where to make those cuts and how these decisions are made will be the question for the special legislative session.

“The biggest challenge is that 60 percent of the state’s budget is constitutionally protected. The 40 percent, where cuts are made, are in areas such as social services and education,” said Whiteaker.

The governor hopes to get a framework in place prior to the special session so that the budget can be worked out quickly and then move onto strengthening the state’s economy, according to a press release from the governor’s office.