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Forecast takes $570 million bite out of state reserves
Washington lawmakers left town last month with a balanced budget and $700 million in a reserve fund. However, the revenue forecast for Washington released today erases most of that cushion.
In Olympia it’s called the ending fund balance. It’s unspent money in the two-year budget in case there’s a natural disaster or the economy falters or both. Well, the rainy day has arrived one day after the governor signed the budget into law.
The latest revenue forecast predicts a slower than anticipated recovery. That means Washington’s $735 million reserve fund for the next two years has dwindled to $163 million. Democrat Ed Murray chairs the Senate budget committee. He says lawmakers may have to come back next January and reduce state spending even more.
“The hope is that eventually at some point somewhere in the future this economy will start to stabilize and until it does this scenario will continue to happen: revenue will fall and we will cut.”
Murray says lawmakers thought they were leaving a “very healthy” ending fund reserve. Senate Republicans – who co-wrote the budget – say they would have preferred to leave a billion dollar contingency fund.
Copyright 2011 Northwest News Network