Washington's revenue outlook hasn't gotten any worse since the last forecast, Arun Raha, the chief economist, declared this morning.
But it certainly could.
The European debt crisis has the potential to become a banking crisis, and if that happened it could spread to U.S. banks, undermining the fragile recovery, Raha said.
"The risk scenario remains the same, heavily weighted to the downside," he said.
As it stands now, Washington has taken in $12 million less than expected since September, a drop that amounts to a half of one percent. The projected tax revenue over the next two years is $122 million less than previously forecast.
Boeing and software publishing both continue to do well, car and truck sales are improving and there are faint glimmers of hope in non-residential construction, Raha said.
Consumer spending is also "mildly encouraging," he said, but only because expectations were so low.
Consumer and business confidence remain weak, however, and unemployment is still a major problem. The nation's real GDP is finally back to pre-recession levels, but it's being produced with 6.6 million fewer jobs, he said.
"We are in the aftermath of the Great Recession and nothing can be taken for granted," Raha said. "We've been here before in this recovery, only to be sucked back into the mire."
On the web:
The Capitol Record (TVW): Revenue forecast: $122 million down, but state's top economist calls it a 'minor adjustment'
Associated Press: Forecast: State faces nearly $1.4B deficit
Political Buzz (The News Tribune): Revenue forecast drops slightly
The Petri Dish (Everett Heral): State budget blues worse a little
Washington Policy Center: Budget writers keep eye on Europe
Upfront Studion (Robert Mak, King 5): More bad news, but a "small glimmer of hope" says state economist