The September forecast reduced combined general fund revenues for the 2007–09 and 2009–11 biennia by $238 million. For the broader near general fund, the reduction was $230 million.
Our brief on the forecast is available here.
Last Friday (September 11), the Forecast Council issued this month’s Economic and Revenue Update, reporting collection experience for the August 11 to September 10 period. This is the last key piece of information going into the next update to the state’s general fund revenue forecast.
State forecasters believe that the national economy has hit bottom, but expect the recovery to be tepid. It will be some time until it feels like the recession has ended.
The Research Council's analysis of Initiative 1033, which will be on the statewide ballot in November, has been posted here. The initiative would establish limits on the annual growth in revenue deposited in state, county and city general funds. Revenues above the limit would be rebated through property tax reductions.
The previous post discussed the recent upturn in the personal saving rate and the prospects that it will head even higher as the economy emerges from recession. In light of the recent increase in the saving rate, the following chart, which plots personal consumption expenditures as a share of gross domestic product, may seem anomalous.
Consumer spending is unlikely to lead the economy out of the current recession.
Here is a chart of annual taxable retail sales in the city of Seattle for the years 1994 to 2008. To remove the effects of inflation, we have adjusted spending to 2008 values using the BLS's Seattle Consumer Price Index.
An editorial in the current issue of the Puget Sound Business Journal promotes our recent Policy Brief, “Seattle’s Lost Decade”: