Economic and Revenue Forecast Council (ERFC) staff today released the monthly Economic and Revenue Update for August. Here are the document's summary bullet points:

• The national economic outlook has weakened significantly since our last forecast. There is now an even greater chance of slipping back into recession.
• Washington’s economic outlook has also dimmed as consumer confidence has plummeted in the wake of U.S. budget wrangling and renewed European sovereign debt fears.
• Washington State revenues reported later in this publication correspond to economic activity in June, and their closeness to the last forecast unfortunately masks how much the economic outlook has weakened since then.
• Major General Fund-State (GF-S) revenue collections for the July 11 – August 10, 2011 collection period were $9.4 million (0.8%) below the June forecast. Cumulatively, collections are $30.8 million (1.3%) below the forecast. Due to the recent deterioration in national economic conditions, the shortfall is likely to increase in the remainder of the year.

Expect a significant downward revision to the revenue forecast at the ERFC's next meeting, which is scheduled for September 15.

On Monday, Governor Gregoire, through Office of Financial Management Director Marty Brown, instructed state agency heads "to prepare for possible cutbacks by submitting 5 percent first-priority reductions and a second 5 percent for a total of 10 percent in GF-S reduction options as part of their 2012 supplemental budget requests."