OLYMPIA – Lawmakers received another grim forecast of the state’s economic future Thursday that makes solving the budget deficit puzzle tougher and a tax increase measure likely.
Declining revenues and rising costs due to more students, prisoners and those seeking health care services are pushing the projected shortfall toward $9 billion, most of it coming in the next two-year budget.
That total is about $725 million higher than the preliminary review given legislators a month ago.
“The outlook is worse both for the nation and the state,” Arun Raha, executive director of the Economic and Revenue Forecast Council said Thursday as he released his forecast.
State Sen. Rodney Tom, D-Medina, one of those crafting that budget, said the public should brace for deep cuts in programs, pay freezes for state employees and layoffs of up to 10,000 state workers and teachers.
“Every family in Washington state” will feel the effects, he said.
“I don’t think this is really going to be a Democrat budget or a Republican budget. This is going to be a devastating budget,” he said.
Tom’s calculation of a $9 billion deficit doesn’t credit roughly $3 billion the state will get from the federal stimulus package. Nor does it subtract $600 million in savings made by the Legislature last month
Even with those adjustments, there is still a multi-billion dollar gap between what the state expects to collect in the next two-year budget cycle and what it would cost to maintain government at existing levels of operation.
Democrats, who control majorities in the House and Senate, hope to put out a budget proposal by the end of next week.
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