Stateline.org has the story this morning about third quarter tax collections plummeting in all 44 states for which early data are available. In all, states collected 10.7 percent less than they did in the third quarter of 2008.
Washington is certainly included in all this, what with last week's revenue forecast increasing the state's budget shortfall to $2.6 billion.
And Brad Shannon at the Olympian is reporting that Gov. Chris Gregoire will release her budget proposal either Dec. 7 or 8.
One of the below the surface storylines from yesterday's shocker of a revenue forecast involves questions about the state's ability to accurately project what tax collections will be over time.
Arun Raha, the state's chief economist, has acknowledged that models being used today are producing misleading results, leading to big changes in projections later. And those projections are important because they're used to write actual budgets.
But it turns out this problem not a phenomenon that is unique to Washington. Stateline.org has a good story posted about other states experiencing the same problem at a time of economic upheaval that is simply unprecedented in modern times.
Sen. Rodney Tom, a Bellevue Democrat and vice-chairman of the Senate's budget-writing Ways and Means Committee, appeared on TVW's Inside Olympia program Thursday to discuss the state's budget situation following the release of a new revenue forecast. Check it out below.
Below you'll find video of Sen. Rodney Tom, a Bellevue Democrat and vice chair of the Senate Ways and Means Committee, and Rep. Ross Hunter, a Medina Democrat and chairman of the House Finance Committee, holding court with reporters after the adoption of a new revenue forecast this morning. The new forecast...
10:32 UPDATE: Victor Moore, the state's budget director, says the budget shortfall has now swelled to $2.6 billion. Asked about how the hole may be plugged, Moore said, "I don't quite see the path yet. We're working on it." "It's getting to be kind of numbing."
10:29 UPDATE: Revenues for the current biennium are now expected to be 3.3 percent lower than the 2007-09 budget cycle.
Raha has now concluded his presentation and the forecast has just been adopted. The floor has been opened to questions from the press.
10:23 UPDATE: Income from the state's real estate excise tax has started to grow but revenues from revenues from the retail sales and business and occupation tax are "failing to improve" even if they have "reached bottom."
10:20 UPDATE: Exports will help the Washington economy outpace the nation's. But employment growth is expected to be quite slow and may not pick up in earnest until the third quarter of 2010.
10:18 UPDATE: "We got a small boost from cash for clunkers, but it's gone now," Raha said. He said the program may have only expedited new car purchases that would have occurred anyway and that the positive impact of additional purchases has been marginal.
10:15 UPDATE: Raha is focusing on impacts on small businesses, which are expected to produce most of the new jobs the state will experience. But small businesses are still finding it hard to get loans from local banks, in part because of banks' overexposure to the commercial real estate market. This is one factor that will slow our recovery, Raha said.
10:10 UPDATE: The forecast itself and related documents have now been posted on the Council's website.
10:07: UPDATE: Raha said the forecasting model being used is producing misleading results, as revenues have repeatedly fallen short of forecasts. "I should have been more wary of our model," Raha said.
10:04 UPDATE: The meeting has started. "The good news is the economy is finally recovering," Raha said. "The bad news is revenue is not."
He notes the revenue forecast for the current two year budget cycle has dropped by a whopping $4.6 billion since February, 2008.
10:00 UPDATE: Here's the news, according to handouts that are being distributed right now, and it's not pretty. Revenue is expected to be down by $760 million for the rest of the 2009-11 biennium. That should easily push the budget shortfall past the $2 billion mark, but we should hear confirmation of that over the next hour.
9:50 A.M.: We're set up in Senate Hearing Room 3 of the John A. Cherberg Building here on the Capitol campus awaiting the 10 a.m. release of a new state revenue forecast that will be used by the governor to write her budget proposal. That plan is due out next month. The House and Senate will then begin crafting their plans when they convene their 2010 legislative session Jan. 11.
No one is expecting state's Chief Economist Arun Raha to present good news and another drop in anticipated tax collections is anticipated. But we'll know for sure in just a few minutes.
Be sure to tune in just before 10 a.m. Thursday when The Hopper will live blog the meeting of the state's Revenue Forecast Council. And check back later when we'll be posting video of Sen. Rodney Tom's post-meeting exchange with reporters.
The council will be approving a new forecast of tax collections that the governor will use to build her budget proposal upon. That proposal is due out next month. The Legislature will then craft its version of the budget re-write in March.
Word on the street is that state Insurance Commissioner Mike Kreidler is going to be releasing a study Thursday that will attempt to outline the cost of uncompensated medical care in Washington. You can read the details here.
It will also attempt to identify how many people lack health care coverage. "Staggering" county by county numbers are promised.
Washington's unemployment rate ticked up to 9.3 percent in October, up from 9.1 percent in September, according to the state's Employment Security Department. You can find their press release here.
The national unemployment rate in October was 10.2 percent.
September unemployment also initially was reported to be 9.3 percent but was revised downward after further analysis. In all, the state had 120,000 fewer jobs in October than during October, 2008. The leisure and hospitality and manufacturing sectors led all industries in job losses.
The unemployment rate was 8.8 percent in King County, 9 percent in Pierce County, 10.1 percent in Snohomish County and 8.4 percent in Spokane County.
Cowlitz County had Washington's largest unemployment rate at 12.9 percent and Whitman County had the state's lowest at 4.7 percent.
The Secretary of State's Office has set up a cool new website dedicated to the art of redrawing all of Washington's 49 legislative districts. That occurs following every federal census to ensure that each district has roughly the same number of people in it. And since population trends ebb and flow across...
That's according to The Olympian's Brad Shannon, who covered this morning's meeting of the state's Caseload Forecast Council. Their new forecast of demand for state services coupled with news we first reported here about a new tax collections report has pushed the budget shortfall higher again.
You can find Shannon's report here and the new caseload forecast here.
The Senate Democratic Caucus is comprised of 31 Democratic Senators from Washington State. For more information visit SenateDemocrats.wa.gov.
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