Projected deficit has grown by $2 billion, according to new interim revenue forecast

At the request of state lawmakers, the Economic and Revenue Forecast Council has released an interim forecast today ahead of its regular report in March.

The news is grim. Here's Governor Gregoire:

Today’s preliminary revenue forecast reflects the severe effect the national recession is having on the state’s budget.

In the budget period that ends June 30, we now face the loss of an additional $721 million, which does not include caseload projections that will be released next month.

The drastic drop in state revenue, brought on by the deepening recession, will require us to take decisive action. My budget office and I have been expecting and preparing for this shortfall, and we are working now with legislative leaders to address the shortfall through the end of this biennium.

The forecast for the next biennium is not much brighter, with a projected additional $1.6 billion drop in revenue resulting in an approximate $6.8 billion shortfall for 2009–11.

This number represents about 20 percent of the state budget, the largest shortfall in state history.

To put this number in perspective, every dollar we now invest in higher education, our corrections system and children’s health care services would not be enough to cover the shortfall. Washington and 45 other states now face budget shortfalls of an estimated $350 billion.

It is becoming plainly evident that new revenue is needed to prevent Washington State from collapsing into unrecognizable, dire poverty.

As Governor Gregoire points out, we could wipe out all funds for major public services like universities and jails - and that still wouldn't be enough to close the projected gap. We can't afford the devastation that cuts alone would bring - we have to find ways to raise new revenue, or we'll all suffer the consequences when our quality of life drops off a cliff.