Yesterday OFM released its outlook for the state budget through FY 2017. (Here’s a link to today’s slightly revised version, a tweak to footnote h). Kriss presented a biennial look at the outlook yesterday.

There’s been some news coverage. I’m quoted in Washington State Wire.

Richard Davis, president of the Washington Research Council, said the new projection offers a dismaying look into the near future. “It’s a sobering and realistic view of the continuing budget problem facing the governor and Legislature,” he said.  “A down payment on McCleary will be a top priority for many, and there’s no place to go for the money without hitting other services and programs. While we may call those cuts ‘reductions from projected increases,’ when you’re addressing entitlements like Medicaid, those reductions have real consequences.

“Collective bargaining, particularly after the Western Washington University agreement, will be challenging; no increases are included in the outlook. In addition, preserving – if not increasing – higher education funding is a priority for business leaders and many legislators of both parties.

“Then there’s the cost of Medicaid expansion, should lawmakers decide to take the feds up on the ‘zero down’ offer from the feds. Add in a minimal budget reserve and I think it’s safe to assume the real shortfall for 2013-15 is in the $1.5 – $2.0 billion range. Again, the shortfall is a problem to be solved. The numbers will change as policies change. And, let’s not forget, the economy remains soft and a downward revision in the revenue forecast in September or November is not out of the question, increasing the gap between spending and revenues.”

Brad Shannon’s story for the Olympian is here. As should be expected, the bleak projections are cast in light of this year’s gubernatorial campaign.

The results cast doubt on both gubernatorial candidates’ claims that they can increase school funding but not raise general taxes. Republican Rob McKenna said last week that he can balance books in 2013-15 and put $1.7 billion more into K-12 schools and higher education by 2015 without raising taxes.

 Democratic Party nominee Jay Inslee has made similar claims, saying he would put more money into K-12 schools by increasing economic growth, trimming spending, closing a few tax breaks and controlling health care costs.

 Gregoire disputes that it can be done…

Resetting priorities and controlling costs get you a long way. The new governor’s greater challenge will be gaining legislative support for his proposed alternative.

Andrew Garber’s Seattle Times story leads with the political problem, with a clear statement from governor’s budget chief.

“I’m thinking of political realities and budget realities and the uncertainties of the economy, and I can’t see it today,” Marty Brown, the governor’s budget director, said of the candidates’ promises.

There will be one more revenue forecast before the general election and another in mid-November.