Official Forecast Out, Now What?

The legislative session is halfway over and the discussion over what to do about the unprecedented deficit is not much further along than when the session started. Lawmakers have been waiting to hear the final shoe drop on the budget deficit, and today it did.

Earlier this morning, the Economic and Revenue Forecast Council released the official revenue forecast upon which budgeting decisions will be made. It includes an additional reduction in revenue of $553 million for fiscal years 2009 through 2011. Now that we have this number, the caseload forecast, and more clarity on the federal stimulus package, policymakers should have the information they need to write a budget.

That budget will most certainly include deep cuts in public programs and services. Hopefully the budget process will provide a basis for a broader public discussion about the importance of those investments and the need to have an open conversation about revenue.

One of the most striking things about the forecast released today is that the ERFC now expects general fund revenue to remain flat from 2007-09 to 2009-11. This means we will have more children to educate, more elderly to care for, and more unemployed families in need of health insurance, but no additional money to pay for that growth.

We can change that outcome by considering other ways to increase revenue. Thirty Washingtonian economists and public policy experts signed a letter last month agreeing that revenue options should be on the table. "Implementing deep cuts in government spending and declining to raise revenue through tax increases is not an effective strategy to guide Washington State out of this recession," the letter said. We have all the information we need. Now it’s time to act.