This week’s Q&A is with Sheryl Hutchison, communication director for the Employment Security Department. The department is responsible for tracking employment statistics, maintaining WorkSource offices around the state and much, much more.

Q: What’s the latest unemployment rate? Is the economy recovering yet?

Hutchison: Let’s start with the first question. We announced today that the unemployment rate in June dropped to 8.9 percent, which is the lowest since April, 2009. That’s obviously a better direction.

The next set of statistics for July will come out Aug. 17.

In all likelihood what we’ve been seeing when the rate has dropped as much as this one did, chances are it will be revised up to 9 percent.

But, it’s just exciting to see something less than 9 percent. This is the third month in a row that it has declined. Since the start of the year, we’ve had a net job growth in this state of more than 23,000 jobs. For us, that’s a lot more exciting than what the unemployment rate is. You’re seeing things turn around – it’s not a steep U-shaped recovery where it’s going right back up. But it is the right direction….last year (in the same five-month period) we had lost about 77,000 jobs. So that’s a big sea change.

Q: Part of high unemployment is that it depletes the Unemployment Insurance trust fund. When the Legislature increased the benefit payout, there was some concern the trust fund would be depleted too far. Where does that stand?

Hutchison: We still have the healthiest trust fund in the country. Thirty five states and territories have bankrupted their trust funds. Furthermore, we do not anticipate triggering any surcharges.

One of the benefits going into the recession with a healthy trust fund is it allowed us to increase benefits. At the end of May, the trust fund reserves were at 13.9 months. Typically, the federal government advises that you go into the recession with at least 12 months. We’ve come down, but we’re still healthy.

Q: Do you anticipate the fund dipping further?

Hutchison: No, we really don’t.  Part of the reason is that through our governor and the Legislature, we’ve created a responsive system that reacts before we get to a critical stage. The result is you do start to see taxes start to rise, but it should happen in a gradual manner — rather than in other states when you see these sharp ups and downs, ours will kind of undulate for a while. They’ll go up for two or three years – that provides more stability.

Q: Have rates increased already?

Hutchison: They did start to increase this year. They’ll go up a little bit again next year. Probably … in 2012 they’ll start to flatten out. We don’t know yet – there’s a lot to happen between now and then. In 2011 it’ll go up again a bit more.

We call them “taxes,” but for the most part it’s really an insurance system with insurance premiums. So if you’re an employer who uses the program more, you’re going to pay a higher premium than an employer who doesn’t.

But it is an insurance system, which means shared costs. Some people who don’t use it at all are going to pay some of the freight for the people who do. There is more cost shifting going on right now – the people who haven’t used it are having a larger percentage increase than those at the top.

Q: Are you hearing complaints about that? From people who haven’t laid anyone off but are seeing a large increase in their premiums?

Hutchison: You always do. No one likes taxes. Some understand the system – they’ve been with it for a long time. If you’re someone at the bottom of the system whose rate is small – less than 1 percent of payroll – you might have seen your premiums double.
There’s two parts of the rate – there’s the experience rating and then there’s the piece that’s a socialized cost. That cost-shifting component varies more frequently. Experience rated taxes are averaged out over four years. They’ll see some increase over four years rather than just in one year. But it does mean there’s more cost shifting right now to make up for the loss in the trust fund. Our system is designed to increase the socialized cost to help even that out.

Q: Let’s talk about the Unemployment Insurance changes required by federal law. What needs to happen, and when does the Legislature need to make changes?

Hutchison: The Department of Labor has been encouraging states to do what we call “modernize” the unemployment system. (more…)

Tags: economy, Thursday Q&A, unemployment, WorkSource

I just returned from a two-hour bus tour of high-speed rail projects funded by federal stimulus money.  The tour was part of a Joint Transportation Committee meeting in DuPont today.  Washington received $590 million to improve passenger service throughout the I-5 corridor.  We ask lawmakers if the improvement projects will really get people out of their cars and onto the rails.  Sen. Mary Margaret Haugen, chair of the Senate transportation committee, talks about her long-term vision for high-speed rail service extending to eastern Washington. On set, I’ll be talking with a rail expert from the Washington Department of Transportation.

Also on The Impact this week, the state’s top economist Arun Raha joins me in the studio to talk about his newly released economic and revenue update. You’ll hear his latest predictions on construction, manufacturing, unemployment and tax collections.

You can watch The Impact Wednesday nights at 7 p.m. and 10 p.m. on TVW and on our new channel KBTC on Friday nights at 7 p.m.

Tags: economy, High speed rail, The Impact

Tags: banks, economy, Gregoire

Bryan Moore, nonpartisan staff for the Senate Ways & Means Committee, gave a budget presentation this morning to the Senate Early Learning and K-12 Education Committee. Part of the presentation was a a side-by-side comparison of how the solution of the 2010 budget shortfall could affect budgets down the road.

The calculations:
- If the $2.6 billion shortfall is addressed the way the Governor’s current budget (Book One) calls for and nothing else changes, the state could face a $2.8 billion shortfall next biennium.

- If the state backfills the budget with $1.6 billion federal money and no new, the budget shortfall next biennium could grow to $4.1 billion.

- If new revenue is used but no federal money, the state would have an estimated ending fund balance of $100 million in 2011-2013.

- Finally, if federal money and new taxes are used, the ending fund balance next biennium would be about $300 million.

As soon as that chart is available online, I’ll post it here. One important note is that each calculation comes with a different set of circumstances, so it’s not exactly apples to apples. But: This is the first calculation I’ve seen that illustrates how the method for plugging the budget hole has an effect over time.

Tags: Budget, economy, federal money, taxes

“I know I have been called Dr. Doom, but I think today the name is not deserved,” he opened.

The good news: “In the two months that we have had collections since the November forecast … the collection is plus $51.8 million, which means we are coming in above forecast.” Which means the state is collecting more money in revenues than they expected in the past two months — that’s a first since the recession hit.

That means: The November economic forecast may have been too low. We won’t know for sure until next month, when the next forecast comes out.

He said he sent that message out Friday evening but he didn’t find it in the newspaper, “so I’m telling you now.”

Tags: economy, Raha

Those are the words of the state’s chief economic forecaster Dr. Arun Raha. Dr. Raha made the comment this morning during his quarterly revenue report. He was referring to how he feels about the state’s economy today, compared to his last forecast report in June.

Raha’s report said the state expects to take in $231 million less over the next two years than was forecast back in June. Bottom line: lawmakers will need to cut between $500 million and $1 billion from the supplemental budget when they return to Olympia in January.

Watch the entire revenue forecast:

Tags: Economic and Revenue Forecast, economy, Revenue forecast

TVW will broadcast Washington’s quarterly revenue forecast live today at 10 a.m. This is the quarterly update for lawmakers and the governor on how much the state expects to receive in tax collections over the next few months. At his last quarterly forecast in June, the state’s chief economist, Dr. Arun Raha, said the economy was no longer in a freefall but state tax collections were still below target.

Dr. Raha’s economic revenue preview in early September indicated the recession was over, but consumers were still clinging pretty closely to their wallets.   Find out what he reports today live at 10 a.m. on TVW.

For more insight into the forecast, don’t miss Inside Olympia, tonight at 7 p.m. and 10 p.m. Host Austin Jenkins will be joined by State Representatives Kelli Linville and Gary Alexander and Governor Gregoire’s Budget Director Victor Moore.

Tags: economy, Inside Olympia, Revenue forecast

The state’s Employment Security Department released its latest unemployment numbers today for the month of August.  The rate increased to 9.2 percent from July’s revised rate of 8.9 percent.

Washington lost an estimated 8,000 non-agricultural jobs in August. Industries with the largest declines were in professional and business services (2,500 jobs), retail trade (2,400 jobs), and education and health services (1,800 jobs).  More than 319,000 Washington residents were unemployed and looking for work in July.

Employment Security Department Commissioner Karen Lee used today’s announcement to issue a call to the federal government to extend unemployment benefits. “The recession may be coming to an end, but thousands of our unemployed workers will run out of unemployment benefits before the job market begins to recover,” said Lee.  “We need Congress to authorize another extension for unemployment benefits.”

Tags: economy, unemployment, unemployment benefits

Karen Lee and Dr. Arun Raha — the experts in employment and economic issues in Washington state — sat down with Austin Jenkins for tonight’s edition of Inside Olympia.

Here’s a bit of what they had to say, courtesy of TVW’s Mike Bay, who took notes:

- Raha, the state’s chief economic forecaster, said state revenues will lag behind recovery. He doesn’t expect fiscal 2011 revenues to match fiscal 2008’s.

- Lee, who runs the state’s Employment Security Department, said she expects “a long and difficult road for us to get out of this recession.” She cautioned that employment growth would lag the economic recovery. Raha agreed.

- Lee said the biggest challenge facing the ESD and workers is that the post-recovery economy will look a lot different, the old jobs won’t come back, and it will be critical for blue-collar workers to learn totally new skills. She noted you don’t have to be on unemployment to take advantage of ESD’s retraining opportunities.

All that and much, much more on tonight’s Inside Olympia. I’ll post here as soon as it’s available online. Or watch it on TVW at 7 and 10 p.m.

Tags: Arun Raha, economy, Inside Olympia, Karen Lee, unemployment

Van Jones, who is testifying in the Senate Environment, Water and Energy Committee now, said he was happy to be in Washington, a state that’s leading the way on “green” issues.

Jones is the founder and president of Green for All, a national organization that works to put low-income people to work on green jobs.

“Literally everything that is good for the environment is a job,” he said. “Solar panels don’t install themselves.”

Jones says that in a green economy, “the math is different. You don’t just count what you spend, you count what you save.”

“You are in a unique situation very rare in American history. This is one of those moments, like the civil war, like the New Deal, like the 60s — civil rights and women’s rights — literally in that era, when our grandkids are going to study what you did,” he said.

“This assembly will be studied. Now, the question is, are we going to do something truly transformative? Are we going to turn this breakdown into a breakthrough?”

He said the way to do that is to use green jobs as a springboard into a new economy.

Tags: economy, Environment, Van Jones