As a state, we have rightfully made significant long-term investments in public education, health care, and early learning. As the overall economy weakens, residents rely even more on public structures to thrive and prosper in times of insecurity.

 

Today, the state's Economic and Revenue Forecast Council revised their estimate of the amount of money available for the state budget. They expect a $167 million reduction in revenue due to ongoing economic problems including oil prices and the housing slump. Others factors contribute another $57 million decrease.

 

The new revision does not significantly alter the fiscal challenges we face. As we have said before, these challenges arise from an ongoing structural deficit in which state revenue does not keep up with spending. In the upcoming legislative session, it is expected that the state's budget writers will have to deal with a budget deficit of over $2 billion, endangering the state programs that people need.

 

The continuing projection of a significant deficit is a matter of public concern and a deliberate conversation about how to close the gap should begin in earnest. It is important to note, the problem is not one of spending; current budget figures are largely in line with past budgets as a share of the economy (see figure above). Instead, changes to our revenue structure must be part of the discussion. 

 

Contact: Aiko Schaefer or Remy Trupin at 206.262.0973