ABC - Geopolitical Uncertainties Hit Washington State Revenues

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Home Page >> Newsroom >> Industry News >> Volume 2011 >> Issue 1 >> Geopolitical Uncertainties Hit Washington State Revenues

GEOPOLITICAL UNCERTAINTIES HIT WASHINGTON STATE REVENUES (03/17/2011)

The economic outlook remains clouded with a great deal of uncertainty. Recent geopolitical developments have cast yet another shadow over the economic recovery. First, we had the volatility in oil prices because of political unrest in the Middle East. Now we have the tragedy in Japan, the world’s third largest economy, and one of
the state’s leading trade partners. The recovery continues to face other headwinds – slow job growth; a sluggish housing market; tight credit for small businesses; consumer retrenchment after the holidays; and fiscal drag from the federal stimulus winding down, as well as, cuts in state and local government expenditures. Boeing’s tanker win will provide an important economic and psychological boost to the Washington State; however the recovery in Washington, as in the nation, is being held back by a weak housing market and sluggish job
growth.

Though revenue collections continue to grow, receipts through March 10 are $85 million below
the amount forecasted in November. A diminished rate of revenue growth is now expected to
continue well into the next biennium.

2009-11
Baseline: $28.0 billion, which is $79.8 million (0.3%) less than the November forecast.
Optimistic: $120 million (0.4%) more than the baseline forecast.
Pessimistic: $160 million (0.6%) less than the baseline forecast.

2011-13
Baseline: $31.9 billion, which is $698.4 million (2.2%) less than the November forecast.
Optimistic: $2,325 million (7.3%) more than the baseline forecast.
Pessimistic: $2,486 (7.8%) million less than the baseline forecast.

Please see our full report for more information. You can access this report at: http://www.erfc.wa.gov/forecast/documents/rev20110317color.pdf