Response to this morning’s revenue forecast

After the Economic and Revenue Forecast Council announced today that they expect the state to collect some $523 million less than previously forecast in the next biennium (see posts below), the responses rolled in.

Gov. Chris Gregoire directed cabinet-level agencies to reduce their budgets by 2 percent.

Rep. Gary Alexander said in a statement that the state must make bigger budget cuts.

And Sen. Joe Zarelli said in a statement that the majority party has done little to lead the state toward financial recovery.

Click through to read the entire statements.

Rep. Alexander:
“This revenue forecast continues to show how a house of cards cannot stand. We missed opportunities this past session to create a structurally-sound budget and we continue to see the ramifications of our inaction. The band-aid approach that was used to close our budget deficit continues to bleed.
“The governor has the authority and ability to make across-the-board reductions in her cabinet agencies, and she should exercise this option.
“We cannot let this forecast lead us down the road to tax increases. Our budgets need to be based on the revenue the we have, not the revenue we want. Our hard-working families cannot afford any kind of tax increase.”

Sen. Zarelli:
“The new budget doesn’t take effect for almost two weeks and it’s already projected to be in the red two years from now. The governor’s budget staff believes it can find another 200 million or so in savings to move it back toward positive territory; I hope they bring those actions forward sooner rather than later, because if there’s one lesson that should have been learned from the 2009 session, it’s that making reductions sooner rather than later is the fiscally responsible thing to do.

“I certainly hope an economic recovery is on the horizon even though the majority party has done little to help our job creators feel welcome and be competitive. But for today the question is whether the governor can do enough on her own to get the state’s feet back on firm financial ground, or whether the Legislature needs to act. I suspect as new caseload numbers come in, the projected imbalance of almost 200 million dollars – which is understated by 70 million because of legislation that did not pass – will double.

“Let’s remember the Legislature could have saved billions of dollars, and put this forecast in a completely different light, if it had acted quickly to reduce spending back in January. By failing to grab what the governor called its ‘opportunity to reform’ – which could have followed the approach we laid out – the majority party ensured our ride on the ‘budget rollercoaster’ would continue.

“We may be in better shape than California, but that isn’t saying much. This new budget is propped up with stacks of money supplied by the federal government and diverted from other state accounts. That’s looking pretty shaky today, and it is likely to look much worse two years from now.”

Rep. Ed Orcutt:
“I’m hopeful this new forecast is a continuing indication that our economy is beginning to stabilize. It’s possible we may see some small downward trends in upcoming forecasts, but I’m hopeful the sharp drop in revenue collections is coming to an end.
“Whether we are in a consumer-led recession or an investment-led recession, we cannot afford to take any more money out of taxpayers’ pockets. Any adjustments to our budget must be to the expenditures, not revenue. We must align our budgets with our revenue, not our revenue with our budgets.
“Based on the information we received today, I don’t see the need for a special session. I believe the September revenue forecast, the upcoming caseload forecast, and the governor’s ability to cut costs through her cabinet agencies, will dictate whether or not a special session is needed.”

Tags: Revenue forecast