Revenue shortfall growing

New prediction adds millions to budget hole

PATRICK CONDON, THE OLYMPIAN

OLYMPIA -- The state's already gaping $1.25 billion budget shortfall could widen by $50 million or more as the economy continues to falter, leading lawmakers said Monday.

"I heard that," House Speaker Frank Chopp said Monday, referring to the $50 million prediction. Sen. Dino Rossi, the ranking Republican on the Ways and Means Committee, said he heard similar figures.

Gov. Gary Locke was less specific, saying only, "It could be $25 million, it could be $50 million. We're waiting on pins and needles ourselves."

The exact figure will be released Feb. 19 at a meeting of the State Revenue Forecast Council. In the meantime, Locke said, his office is making plans for how the state will supplant the additional loss on top of the existing $1.25 billion shortfall.

"It just means that we're going to have to dig deeper and come up with additional options," Locke said at a news conference. It could include more cuts to state government, Locke said, or digging deeper into state emergency reserves.

Washington's limping economy, afflicted by the Sept. 11 terrorist attacks and the ensuing Boeing layoffs, continues to lag as the rest of the country appears to be slowly headed out of recession, Locke said.

"It's going to be very, very flat" for a while, Locke said. "This sluggishness will be with the state for several years."

Even when the recovery starts, Locke said, state economists "believe it will be a very slow recovery. It's not going to be a strong recovery like we've seen in the past."

Locke's current budget plan was built around the assumption that the shortfall would be $1.25 billion, and included a mix of state government cuts, reserve spending, federal government money and revenue-generating proposals. Once the forecast is officially released next week, legislative budget writers will kick into high gear.

Locke said he hoped legislators might rethink their reluctance to his proposed 10-percent tax on minicasinos, which he hoped would raise $75 million. The bill appeared to die for lack of support last week.

Rossi said Republicans would continue to push for the state to rein in discretionary spending, by implementing hiring and travel freezes, and other cost-saving measures.

"We got into this fix one million dollars at a time, and we can get out of it one million dollars at a time, too," Rossi said.

The Olympian Copyright 2002

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