Richard S. Davis

Grappling with a $2 billion state budget shortfall

Yesterday’s official revenue forecast confirmed expectations that deteriorating economic conditions have plunged the state budget into a deep hole. The loss of $1.4 billion in anticipated revenue collections, combined with the need to build reserves, means lawmakers confront a problem approaching $2 billion. How they will handle is so far unclear. While it’s likely a […]

Revenue collections report offers a bleak preview of Thursday's forecast

The economic and revenue forecast council’s latest collections report is available here. Here’s the crux: Major General Fund-State (GF-S) revenue collections for the August 11 – September 10, 2011 collection period were $9.5 million (0.9%) below the June forecast. Cumulatively, collections are $40.2 million (1.2%) below the forecast. Even though revenues have so far been […]

New pension assumption will increase pressure on state budget

  As Brad Shannon reports in the Olympian, suggestions made by the state actuary for improving the solvency of the state pension system will result in a further squeeze on the state’s troubled budget. In a new report, actuary Matt Smith recommends that lawmakers lower rate-of-return expectations on pension investments to about 7.5 percent over […]

WRC economist named to state debt commission

Kriss Sjoblom, WRC vice president and economist, will serve on the new state debt commission established by SB 5181. Here’s how the bill report describes the commission’s activity. A commission is established to examine the use of debt in Washington State and make recommendations on debt policy and debt limitations. Commission members include the State […]

Tax increase proposals showing up on state ballots…

Stateline.org reports that taxpayers in more states will be voting on revenue increases. Tight budgets, several years of spending cuts and continued economic sluggishness explain part of the trend. But, more important than these, in several states voters have tied lawmakers hands by requiring legislative supermajorities or voter approval for tax increases. Also implicated is […]

Washington missing growth opportunities…

Think it here, make it there. A typically thoughtful column by Bill Virgin in Seattle Business suggests that’s the path being taken by key innovators in our state. Virgin’s column, Losing Ground, looks at what may be a troubling pattern. He acknowledges Washington’s competitive advantage in research and development, particularly in emerging industries. Washington does […]

State Supreme Court should rule on supermajority

Another year, another challenge to the voter-approved supermajority requirement for tax hikes. In my column in the Everett Herald, I say it’s time for the Court to put the issue to rest. The justices may again decide the case on procedural or technical grounds, ducking the threshold question. For example, they could conclude the group […]

First media coverage of our impact analysis of I-1183 liquor privatization

Credit to Erik Smith at Washington State Wire for his report on the revenue impact analysis Special Report we released yesterday. An initiative that would shutter the state liquor stores would generate huge revenue for state and local governments – an extra half-billion dollars over the first five years alone, according a new report from the […]

States will feel the impact of federal deficit reduction

In my column today, I discuss the growing reliance of state governments on federal funding. In 2008, before the stimulus act, federal funds accounted for about 26 percent of total state spending. With the stimulus, that share rose to nearly 35 percent in 2010, returning to pre-stimulus levels next year, long before state revenues recover. […]

New interstate comparison of business taxes – WA still high

The Council on State Taxation released its annual report on business taxes. The research, conducted by Ernst & Young LLC, is the most comprehensive analysis available. The press release highlights document the lingering effects of the recession (data are for 2010). Key findings of the study include: After falling by 0.9% in FY2009, state and […]