The state is facing the largest budget balancing challenge in its history. According to the latest forecast by the Economic and Revenue Forecast Council , the revenue picture continues to worsen and if current spending trends continue the deficit will be over $9 billion through mid 2011. House and Senate legislators are expected to announce their versions of the 2009-11 budgets early next week. Although the state will be getting billions in federal help, it will not make up the shortfall and there will be significant cuts proposed. The pressure will be on to make wise decisions and not undermine the foundations for a sustainable economic recovery. The Washington Economic Development Commission will track the legislative process and assessing the implications for long term innovation performance and pace of economic recovery. Of particular interest will be decisions focused on talent and workforce development, entrepreneurship, regional innovation initiatives, technology commercialization and smart, clean, green infrastructure.
The Economic and Revenue Forecast Council no longer believes that the state economy will lead the national economy in the recovery. Instead, the state economy will recover at about the same time as the national economy. "…Our new baseline forecast assumes that the U.S. and Washington economies will be in recession for most of this year, flattening out sometime late in the third quarter. Growth will remain flat in the first half of 2010, and improve only in the second half of the year. Job losses will continue even after the economy is in recovery…. The forecast for the 2009-11 biennium is $27.9 billion, which is $2.1 billion less than expected in the November forecast. Compared to the unofficial "early guidance" forecast presented in February, the forecast for the current biennium is down $15 million and the forecast for the next biennium is down $538 million." Excerpt Economic and Revenue Forecast Council (March 19, 2009)
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