Friday's late afternoon announcement of the $423 million cut in revenue projections got mixed coverage in the morning papers, along with the predictable partisan differences of opinion on what it all means.
The Seattle PI makes it the front page headline story: State revenue forecast shrinks. The story neatly frames the partisan divide.
Democrats see a strong economy and a forecast that won't much affect the spending plan that they unilaterally passed last year. Republicans see it as a sign that their warnings that the economy cannot support double-digit spending have come true.
Though lawmakers had been predicting a decline in projected revenue for some time, the news came as a blow to Democrats who had hoped to pass a supplemental budget that would leave more than $1 billion unspent.
Most now concede that that level of savings is no longer realistic.
Although the budget is now in the hands of legislative leaders, the governor - who had previously insisted on more than $1 billion in reserves - appears to be rethinking her options.
Though she could leave her spending priorities untouched and still maintain more than $300 million in unrestricted savings, Gregoire said she wouldn't.
"I'm not interested in just taking that and going home. No, I want a reserve," she said.
The Seattle Times relies on David Ammons AP story, which it carries on B4. He quotes one prominent legislator as proposing to address the problem by postponing it.
Rep. Hans Dunshee, D-Snohomish, vice chairman of the House Appropriations Committee, said Friday night he hopes lawmakers will be able to save at least $700 million. He said lawmakers may save money by "pausing" the phase-in of new spending, such as daylong kindergarten.
Despite the revenue hiit, the economic picture looks relatively good, as the papers report. Rich Roesler's blog post summarizes it well.
The state's long-term economic growth prospects remain good, Sohn says, and although the national economy seems to have dipped into a shallow recession in the first two quarters, Washington isn't expected to see a recession here. One big reason: Software and aircraft sales and employment remain solid, and those and other state exports are helped by the weak dollar.
In fact, Sohn said, Washington seems to have one of the strongest state economies in America right now.
Sen. Joe Zarelli, R-Ridgefield, concurs in The News Tribune.
Sen. Joe Zarelli, top Republican on the Senate budget-writing committee and a council member, also said “our economy is fine” and “the job situation looks good.”
The Legislature should be more concerned with the long term, he said, and should put the brakes on spending given the lower forecast.
There's a lot more. The governor wants to see what the legislature does. Democrats want to stick to their priorities, deferring but not trimming, and Republicans, who warned last year of unsustainable state budgeting want to see discipline and cuts.
Overall, the state appears likely to avoid a recession, employment remains healthy, and yet, we're facing a serious structural deficit. To twist a line from the 1992 Clinton campaign: "It's not the economy. It's the spending."
