Enumclaw Leaders Take Wait and See Approach with Lower State Revenues Forecasted

The state’s budget hole got deeper Thursday, with a lowered revenue forecast that reflects a “fragile” economic recovery held back by slow job growth, sluggish construction and now the effects of Middle East unrest and the earthquake and tsunami disaster in Japan.

For the current 2009-2011 budget, revenue is expected to be $28.0 billion, which is $80 million less than the state’s previous projection in November, according to the Economic and Revenue Forecast Council.

And looking ahead to the next two-year budget, which lawmakers are grappling with now, revenues are expected to be $31.9 billion, which is $698 million less than the previous forecast.

And even this latest projection is uncertain because of what’s happening around the globe.

“First, we had the volatility in oil prices because of political unrest in the Middle East,” said Arun Raha, the state’s chief economist, in a statement accompanying the forecast. “Now we have the tragedy in Japan, the world’s third largest economy, and one of the state’s leading trade partners.

“The recovery continues to face other headwinds--slow job growth; a sluggish housing market; tight credit for small businesses; consumer retrenchment after the holidays; and fiscal drag from the federal stimulus winding down, as well as cuts in state and local government expenditures. Boeing’s tanker win will provide an important economic and psychological boost to the Washington state; however the recovery in Washington, as in the nation, is being held back by a weak housing market and sluggish job growth.”

Lawmakers will have to figure out where to make cuts as they deal with the lowered projections.

Similarly, Enumclaw leaders reserved judgement on the impact of today's news, choosing instead to wait and see what the state Legislature will do in order to balance the budget.

"I can't really comment until I see where the Legislature decides to cut," Enumclaw City Councilman Richard Elfers, who also chairs the city's finance committee, said today. "What happened in the last round of budget cuts is that Gov. Chris Gregoire tried to protect the cities from some of the worst damage. ...  The Association of Washington Cities does a pretty good job of lobbying for cities, and the governor has tried to help, but eventually, something is going to get cut."

Enumclaw Schools Superintendent Mike Nelson, likewise, said he'd refrain from commenting until it was clearer how the Legislature will proceed with the new projections. Nonetheless, he said that funding for K-12 represents the biggest pot and local districts are watching Olympia closely.

Among those in Enumclaw keeping up with the Legislature is school board member and legislative representative Tim Nickson, who has already of cuts that local school districts are facing. 

March 7 was the last day for bills to be considered in each respective house, he said, and now the bills go through votes and various compromises before deadlines later this month. "It's [budget changes and cuts] a moving target at the moment. ... People held off to find out how bad is this economic report going to be. I think things will solidify over the next week. Up to now, things have been put in bills and then taken out."

The legislative session is set to run through April 24, though there's some doubt it will wrap up in time.

For parents and others who value education, Nickson echoed the sentiments of state Rep. Cathy Dahlquist (R-Enumclaw) who in call last week said the squeaky wheel gets the grease in Olympia. "The key is you as a parent have to tell your legislators how it’s [budget cuts] going to affect your community and family. You really have to personalize it: 'This is what it’s going to do to my kid.'"

More:

View the press statement summarizing the new forecast.

Read the entire forecast report.