By Jim Cline
The latest report of the Washington State Economic and Revenue Forecast Council, provides a mixed picture of economic strength both nationally and locally.
Among the highlights of the Council on the National economy:
- The National economy is moving “forward at a modest pace” with “several significant threats to economic growth keeping uncertainty elevated.”
- “Federal fiscal policy remains a drag on the recovery” and the government shut down and “impending debt ceiling negotiations are likely to weigh on the recovery.”
- Economic problems in Europe including “weak growth” are “significant threats to the US economy.”
The Council also noted the GDP Forecasts were subdued with an expected growth rate of 1.6% in 2013, rising to 2.6% in 2014, 3.1% and 2015, 2.9% in 2016 and 2.8% in 2017. (Generally economic growth at or above 3% is required to create significant growth in employment.)
Among the highlights by the Council of the Washington State economy:
- As opposed to the “modest pace” of the national economy, the Washington State economy is seen as growing at a “moderate pace.”
- While Washington housing permits “have weakened” home prices nonetheless have “continue to climb.”
The Forecast Council also had an optimistic outlook on the direction of Washington State government revenues. It reported the current biennium revenues were on hundred $38 million above the last forecast and it predicted rising revenues in the next biennium.
The Forecast Council is a non-partisan, bi-partisan effort to develop politically insulated revenue and economic predictions:
The Council consists of two members appointed by the Governor and four members from the Legislature. One legislative member is appointed by the chairman of each of the two largest political caucuses in the Senate and House of Representatives. The chair of the council is selected from among the four caucus appointees. The chair alternates between the Senate and the House and is held by the majority party. The Economic and Revenue Forecast Council was established to oversee the preparation of and approve the official state economic and revenue forecasts. The Council is authorized to employ an economic and revenue forecast supervisor. The supervisor, Washington State’s Chief Economist & Executive Director, is given authority to hire staff to produce forecasts.
The Economic and Revenue Forecast Council is an independent agency; it is not a part of the Executive or Legislative branches. This allows for a nonpartisan professional economic and revenue forecast that is acceptable to the Legislature and Executive, as well as the two largest political parties. This makes the State of Washington unique in its revenue forecasting process.
