OLYMPIA, WA – In Olympia, the sea of red ink is reaching drowning depth. Washington state’s chief economist today subtracted another three-quarters of a billion dollars from the state checkbook. The updated revenue forecast widens Washington state’s budget deficit to more than two and a half billion dollars. Olympia Correspondent Tom Banse has details.

The good news according to chief economist Arun Raha is that Washington’s “economy is finally recovering.” The bad news is that state revenue is not. Raha told state lawmakers to forget about receiving $760 million in anticipated sales taxes, business taxes, and other revenue. The forecaster says consumers are simply not spending.

Raha: “Gas prices have been creeping up and not likely to go down soon. The unemployment rate is still rising. So, it is not surprising that consumer confidence – while up off the floor – is treading water.”

Washington Governor Chris Gregoire and some top Democratic legislators say they're open to tax hikes to fill the growing budget hole. Republicans warn against that. Gregoire will take the first run at rebalancing the state budget next month.

Copyright 2009 Northwest News Network

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