Today, the Economic and Revenue Forecast Council gathered at noon in John O’Brien, House Hearing Room B, to adopt a new forecast that will drive budget decisions this session.
Live blogging below:
12:04 The updated economic forecast doesn't reflect real change. A slight uptick in the housing market.
12:05 European uncertainty continues to impact our economy.
12:06 Forecast revenue increase of $59 million expected in the current biennium, $19 million decrease in 2013-15.
12:08 Household debt is down, meaning more money is available for other purposes.
12:08 Auto sales are up and housing is still affordable which means people are looking for houses.
12:09 There was positive residential home growth in larger counties.
12:11 Consumer confidence is not as strong as we would like to see.
12:12 Exports are a little troubling.
12:12 Revenue collections are back to where they were at the beginning of the recession, which means a very slow recovery.
12:13 Revenue increase was up by 5 percent in fourth quarter. Sales tax was up a little in the fourth quarter, so there is some positive activity.
12:15 There was spike in excise tax collection at the end of 2012. In 2013 though, it has been on track with anticipated numbers.
12:15 Liquor sales saw year over year growth and a volatile market, but again some growth.
12:16 Expecting to be up by $59 million in revenue over the Nov. forecast.
12:17 2013-15 sees a decrease of $19 million, 2015-17 is projected to decrease by $49 million.
12:17 Adjustment for inflation and population growth, we anticipate a decrease in revenue.
12:20 Conclusion: Up this biennium, down next. 8.2 percent growth between 2009-11 and 2011-13, 6.6 percent between 2011-13 and 2013-15.
12:21 Hargrove hopes consumer confidence isn’t too big a lever in this because the numbers appear to be contradicting (low confidence, big purchases).
12:22 Hunter: What happens if the sequester continues? Lerch: If we extend by a month, $6 million decrease in revenue per month.
12:23 Forecast is adopted.
12:27 This forecast assumes sequestration goes into June.
12:28 What does this mean for budget? Hunter: Flat is the new up. Last week we were looking at bad news, so this is better. Makes a hard problem not worse.
12:30 Hill: We can move forward to finalize budget. Hargrove: Things are $500 million worse, but we got a little back. Not the biggest change and still worse since we started session. We must manage expectations.
12:31 Hill: Senate will release a budget in 5-10 days. Hunter: House will release budget shortly after.
12:32 Schumacher: Next week, Inslee will release proposal to balance the budget and address McCleary (K-12 funding obligations).
12:32 Hill: We started later on the budget, but we are on track to release budget on schedule.
12:33 Are you writing budget with revenue in mind? Hill: We are still finalizing things. Goal is not to extend expiring taxes or introduce new ones. Goal is to live within our means.
12:34 Hunter: Hard to do everything without additional revenue.
12:36 Hunter: When we look at the budget, we make assumptions around what will and won’t happen. Population and revenue growth tend to cancel each other out.
12:37 How much in McCleary? Hunter: Pretty consistent, need to invest $1.4 billion. This is reasonable, steady, and measurable progress.
12:38 Hill: Focus on 0-23 education plan. Focusing on outcomes that are positive. Money is not the only thing, we must focus on positive outcomes.
12:38 Hargrove: Still working in bipartisan fashion. We are working on this together.
12:41 Hill on where cuts will come from: The interesting thing is the way we look at cuts in Olympia is different than what people think. Spending is up, people just didn’t get what they anticipated. We are spending more, but we need to prioritize where it goes.
12:42 Hill: Spending will increase in many areas, but more in education.
12:44 Should people who rely on social services brace themselves? Hill: We have to do education first, non-constitutional areas will be difficult.
12:45 Hunter: We all have issues to be concerned about. Things did not get worse, but we still have areas of concern.
12:45 Meeting adjourned.