The Washington State Economic and Revenue Forecast Council (ERFC) just released its latest state revenue forecast: Up $110 million through the end of the 2011-2013 biennium, and up another $121 million in the 2013-2015 biennium. That magically brings the house and senate another $231 million closer to agreeing on a budget.
“This should break one of the final logjams,” Senator Andy Hill (R-Redmond) predicted after the forecast was approved by the council. “It’s a relatively small move in a $32 billion budget,” explained Representative Ross Hunter (D-Medina)—about 0.7 percent—but “it closes the gap a little bit.”
The uptick in state revenue during the first half of the year has largely been driven by strong growth in the construction industry. Construction is a particularly important revenue source for the state because of the many ways it is taxed. While the construction industry accounts for only 4.5 percent of the state’s economy, it provides over 8 percent of state general fund revenue, so the the industry gives us a “big bang for the buck in terms of revenue collections,” according to ERFC chief economist Steve Lerch.
The latest state Caseload Forecast Council report is also due out later today, and Hunter let slip that it would project about a $90 million reduction in costs. Combined with the improved revenue forecast, that should take the two sides a long way to resolving their budget differences—assuming the Republican objections are really about money. Still left to be resolved are Republican demands that Democrats surrender on several non-budget anti-worker “reforms” in exchange for the privilege of passing a budget. We’ll see.