SAN FRANCISCO - From bad to worse. That's the short way to sum up Washington state's latest tax revenue forecast.
"Since our last official revenue forecast in November, the state economy has weakened considerably," the state's Economic and Revenue Forecast Council reported Thursday when it released its new forecast, which removed $700 million from the forecast for the current biennium, and more than $2 billion from its forecast for the 2009-11 biennium.
The council is charged with approving the official state economic and revenue forecast used to formulate state budgets.
The council now projects the state general fund will bring $27.9 billion of revenue during the next two budget years, meaning revenue would be completely flat compared to the current biennium.
The 2011 biennium budget Gov. Chris Gregoire proposed in December called for $30.5 billion of general fund spending.
The latest bad forecast will make it even harder to adopt a budget.
Gregoire is a Democrat, and her party has substantial majorities in each house of the Legislature. The governor has been reluctant to talk tax hikes.
Sen. Rodney Tom, D-Medina, vice chairman of the Senate Ways and Means Committee, told reporters last week that lawmakers will put together an all-cuts budget. Then, voters might be asked to approve tax increases.
"I think there will be a revenue package for the voters, but again we are building this budget strictly on an all-cuts budget, and if voters approve [revenues], here's what they'll buy back," he told reporters last week. "We know we'll be making devastating cuts to education."
Rep. Ed Orcutt of Kalama, ranking Republican on the House Finance Committee, said his party would stand firm against tax increases.
"We are in the midst of a consumer-led recession - consumers will be the ones to lead us out, not more government spending," he said. "We need to put all talk of tax increases to rest."
Washington's general obligation bonds carry ratings of AA-plus from Standard & Poor's, Aa1 from Moody's Investors Service, and AA from Fitch Ratings.
The state plans to sell $480 million of GO bonds competitively April 7.