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The state's tax revenues could come in as much as $1.4 billion lower than previously estimated, a number so big that state lawmakers will have to scramble to come up with a response to the worsening economic news.
Arun Raha, executive director of the Economic and Revenue Forecast Council, revealed his updated numbers to legislators at a meeting in Olympia on Thursday.
"The aftermath of the Great Recession is turning out to be a neverending nightmare...I see no end in sight, the best I can hope for is that we don't slip back into another recession," Raha said.
"In normal times, it would be hard to explain the distress in Washington's economy given all that it has going for it," he said, noting the aerospace and tech sectors were strong. "These are not normal times, we are in the fragile aftermath of the Great Recession...fear and uncertainty have overwhelmed consumer behavior."
Marty Brown, Gov. Chris Gregoire's budget director, said the state now faces a $1.28 billion operating budget deficit.
Raha had already readjusted the revenue forecast in June, estimating the state would take $183 million hit over the next two years.
The latest grim news, while anticipated, will increase the pressure on legislators. Republicans, who are in the minority in both the House and the Senate, have called for things like a special legislative session or a bipartisan panel to help come up with solutions.
Gregoire had scheduled a conference call with leading lawmakers for Friday. Democrats said the scope is so dire that a special legislative session might not be practical before lawmakers return for their regular session in January.
"I personally think it's worth taking some action early, but the practical difficulties of doing it are hard," said state Rep. Ross Hunter, D-Medina, his chamber's budget committee chairman.
Sen. Joseph Zarelli, R-Ridgefield, called for a "focused approach," but agreed it would be hard.
"We have far fewer choices."
Meanwhile advocates for the poor and needy say new revenue is needed.
"The Legislature has tried an 'all cuts' approach to pass budgets that just barely pencil out, and end up revisiting those budgets when revenues don't meet expectations," Steve Breaux of WashPIRG said in a statement. "Unfortunately, the Legislature doesn't give equal weight to the loss of revenue through special-interest tax loopholes, and we believe that should be a top budget priority."
Sen. Ed Murray, D-Seattle, said he personally favored asking voters for more revenue to preserve certain services like education and health care.
But Rep. Ed Orcutt, R-Kalama, said that was a mistake and hurt job creation and said even with the latest bad news, the state would still take in more than $2 billion this budget period than the last, two-year span.
"Let's get Washington working again," he said. "Once we address that, our revenue problems and our budget problems go away."
Murray said Orcutt's figures were misleading.
"The numbers you heard about growth in revenue about when times were good, that would be great, if there weren't an increase in the number of our kids in public schools and the increase in health care costs," Murray said. "We need to put our talking points outside these rooms and do what we did last year..and try and move forward."
In May state lawmakers passed a $32 billion, two-year operating budget that closed a $5 billion deficit. They made $4.6 billion in cuts and transferred about $500 million from other accounts to balance the books. Among the cuts were $500 million to higher education as well as deep reductions to health care and K-12 education.
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