Forecaster Drops Washington Revenue Estimate by $482M

SAN FRANCISCO - Washington State's economic forecaster hacked another $482 million from the state budget last week in his quarterly forecast, while saying he is close to calling an end to the recession.

In his estimate released Thursday, chief revenue forecaster Arun Raha revised his forecast for the 2007-09 biennium, which ends June 30, downward by $185 million compared to March, bringing general fund revenue for the biennium to $27.2 billion.

Compared to March, he revised his revenue forecast for his 2009-11 biennium down $297 million, to reach a total of $29.8 billion.

If it weren't for new revenues approved by the Legislature this year, Raha said, the 2009-11 forecast would have dropped by $523 million.

Despite all the bad tidings, Raha found silver linings in his forecast.

"It increasingly appears that we are finally approaching the end of this 'Great Recession,'" he said in the news release. "Initial claims for unemployment insurance appear to have peaked and monthly job losses are diminishing. However, the bottom in this recession will be lower than assumed in March, particularly with respect to the labor market."

In response, Gov. Chris Gregoire said she is directing agencies to further curtail their spending.

"We have been aware of the likelihood of a negative forecast and are prepared to take action," Gregoire said in a news release. "I am directing cabinet state agencies to decrease their general fund employee costs by 2% from what was budgeted."

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