OLYMPIA - The June update of the state revenue forecast released today downgraded the outlook by $167 million.

According to the state Office of Financial Management:

"Revenue for the current budget period, 2007–09, is projected to decrease $49.6 million, resulting in total projected revenue for the biennium of $29.4 billion. Revenue for the next budget period, 2009–11, is projected to decrease $117.3, resulting in projected total revenue of $31.8 billion."

"The revised forecast leaves $359 million in unobligated General Fund revenue for 2007–09. In addition to the budget surplus, the Rainy Day Account proposed by Gregoire and passed by the voters last fall will contain $442 million in constitutionally protected reserves, placing Washington in a much better position than most states to weather the downturn. Nearly 30 states are already experiencing deficits for the current budget period. "

OFM Director Victor Moore said the downturn does not significantly change the game plan but he indicated cuts may be on the horizon.

"We know there is going to be some pretty significant belt-tightening that we are going to have to do in this budget," he said. "We understand that we are going to have some significant challenges, we are using the processes that we have used in the past to look at government spending."

Republicans noted that the previous Senate budget staff predictions of a $2.5 billion budget gap in the next biennium was on track given the cooling economy.
Asked if OFM would evaluate the balance on the upcoming budget, Moore said:

"I'm not sure how useful that would be."