OLYMPIA — Washington state government has been raising more revenue than initially expected as the economy continues to improve, officials said Wednesday.
The Economic and Revenue Forecast Council projected that tax collections over the next two years will be more than $200 million greater than expected when state lawmakers adjourned at the end of June.
Total revenue over that time period is now forecast to be nearly $33 billion — 7.6 percent more than the previous two-year budget period.
Leading budget negotiators from both parties said the revenue boost is relatively small.
Rep. Terry Nealey, R-Dayton, who serves as the House Republican member on the forecast council, issued a statement of caution.
“I think we’re all very pleased that after a long period of negative forecasts, we’re now seeing a trend of positive ones,” he said in a news release. “However, we need to proceed cautiously as a state because our economic recovery is still fragile. Our state’s employment figures have a long way to go before they reach pre-recessionary levels, especially in many of our rural counties. And with Obamacare soon kicking in, there’s plenty of uncertainty among employers.”
Nealey said the Legislature also “needs to take a lesson” from the past when it spent surpluses in good years and then found itself short on money in lean years.
“That means addressing our state’s obligations and priorities — such as providing for the educational needs of our children under the state Supreme Court’s McCleary decision — and also putting money aside in case of future economic downturns,” Nealey said.
Democratic Rep. Ross Hunter said the forecast doesn't create any major opportunities, especially since there are problems that need to be resolved and ongoing litigation that could impact the budget.
“This doesn't drive a lot of behavioral change,” Hunter said.
State projections still aren't accounting for any money that could be raised from looming introduction of taxed marijuana sales.
Hunter said lawmakers have no idea how much money that sector could raise for the state, and he doesn't want to include it in budget projections until the state can actually count the dollars.
The extra money in Wednesday's forecast could help lawmakers as they search for ways to put more dollars into the public education system. Still, forecasters say there are a number of economic risks, including congressional gridlock, rising mortgage rates and possible economic turmoil in Europe.
“We do feel that there are substantial downside risks,” said Dr. Steve Lerch, executive director of the Economic and Revenue Forecast Council.