State Budget Crisis
8:12 am
Fri March 18, 2011

Partisan divide flares as state budget worsens

Washington's budget shortfall has grown to more than $5 billion. That's after Thursday's state revenue forecast. Advocates on the left immediately intensified their calls for lawmakers to end corporate tax exemptions. The Governor warned the legislature to avoid budget gimmicks.

Washington's economic forecaster, Dr. Arun Raha, delivered the news to a packed legislative hearing room:

"The economic outlook remains clouded with a great deal of uncertainty. Recent geo-political developments have cast yet another shadow over the economic recovery."

Unrest in the Middle-East and oil prices. Now the Japan crisis. Taken together with other factors, Raha forecasts Washington tax collections over the next two years will still grow by $4 billion. But that is nearly $700 million lower than previously expected.

So what does that do to the state’s projected budget shortfall?

"The problem has become more daunting," says State Representative Ross Hunter.

Hunter, a Democrat, is the chief budget writer in the House. He and his colleagues now have to figure out how to close a budget shortfall the governor's office pegs at $5.1 billion.

Remember that's not a deficit. That's the gap between projected revenues and spending over the next two years.

Democrats and Republicans immediately jousted over whether lawmakers are doing enough for the economy.

"I do believe that the work we're doing here is actually directed at getting people back to work,"states Senate Budget Chair Ed Murray, a Democrat.

Republican Ed Orcutt disagreed:

"There are a number of bills that are languishing in committee right now that could go a long way to helping get people back to work."

After the forecast, more than 1,000 union and anti-poverty advocates rallied in the capitol rotunda. They're demanding lawmakers eliminate tax breaks for corporations to offset some of the budget cuts. Doing so would require a two-thirds vote of the legislature or a vote of the people.

Meanwhile, Gov. Chris Gregoire urged lawmakers to pass long-term budget solutions and avoid short-term fixes, like borrowing against future revenues.

There are five weeks left in the 105-day session.