Tax collections in the state are coming in as expected, according to a monthly economic report released today.

Over the last three months, the state collected about $9.6 million more in tax revenue than estimated by the Economic Revenue and Forecast Council. That’s out of about $3 billion in collections, marking a mere 0.3 percent difference than what was predicted.

Nationwide, job growth over the last two months has been slower than expected. Yet at the same time, more people are buying cars and houses, and personal incomes are rising — which sends “mixed signals” about the state of the U.S. economy.

In Washington state, the economic picture is also “mixed.” Employment figures had been slowly growing over the last few months, but the current level is still slightly lower than expected. And although houses have been selling, the prices have been weak.

From the report:

“The risks to a continued recovery in Washington are still high. While oil and gasoline prices have receded somewhat, a European financial crisis remains a real possibility. … We are suffering from fiscal drag from state and local government budget cuts and a construction sector which has stopped declining but is not yet adding to growth.”

Looking ahead, the beginning of 2013 could bring a “severe fiscal contraction” when the Bush tax cuts expire and extended unemployment benefits end, it warned.

Tags: economic forecast

The U.S. House voted Wednesday to extend the Export-Import Bank’s authority for three more years — a moved watched closely here in Washington, one of the most trade-dependent states in the nation.

The bank’s charter was set to expire May 31st. It provides financing and insurance for American companies that sell goods overseas, protecting them against losses in case an international customer doesn’t pay up — which is exactly what happened about to one manufacturing firm in Fife about five years ago.

Pexco is a plastics manufacturer that makes road bumps and other traffic safety equipment in a 110,000-square foot warehouse in Fife. Peter Speer, the VP of sales, said that before the company started using the Ex-Im Bank, they shipped a container full of traffic equipment to Turkey on good faith.

The customer in Turkey never paid, and Pexco never got their product back.

“We still haven’t recovered in terms of establishing a market there, but we’re working on that now,” Speer said. “Once we do that, we’ll have the Export-Import Bank from preventing that kind of financial loss in the future.”

The Ex-Im Bank has insured about $300,000 in sales for Pexco, which distributes its products to 25 countries worldwide. Speer said without that federal guarantee, his company would be less likely to take on new international customers.

“We wouldn’t be able to compete with China or Vietnam or India,” he said. “They may not have a better product, but they are willing to take credit risks.”

Critics of the Ex-Im Bank in Congress have said that the federal program amounts to corporate welfare, and point to the bank’s biggest beneficiary: Boeing. The bank supported about $32 billion in exports last year, with about $11 billion of that in sales for Boeing.

The bill passed by the House on Wednesday extends the bank’s charter to September 2014 and raises the lending cap from $100 billion to $140 billion. The U.S. Senate could take it up next week.

For more on the issue, we have a segment on the latest edition of The Impact below.

Tags: Export-Import bank

The 2012 Legislative session kicked off on Monday, and we covered lots of ground here on the blog and on Legislative Review, our 10-minute wrap-up of the day’s events that airs nightly at 6:30 p.m. on TVW. Here’s a quick look back at what happened this week.

Monday: Opening ceremonies got underway with speeches from Reps. Frank Chopp and Richard DeBolt. TVW aired a two-hour opening day special of “The Impact” with interviews from the Governor and dozens of lawmakers, who touched on everything from the budget to gay marriage and medical marijuana.

Watch Monday’s Legislative Review here.

Tuesday:  Gov. Chris Gregoire gave her final state of the state address, calling for a $3.6 billion transportation package that would include a $1.50 fee per barrel on oil produced in Washington. Sen. Joe Zarelli, R-Ridgefield, delivered the Republican response. That was followed by a news conference where several Republicans said they were concerned that the Governor’s proposed oil fee would cause prices to rise at the gas pump.

Watch Tuesday’s Legislative Review here.

Wednesday: After three years of delivering gloomy economic forecasts, the state’s chief economist Arun Raha announced he was resigning to take a new job in Cleveland — but not without cracking a few of his signature “Arun-ism” jokes first. We kept an eye on two environmental bills — one would ban plastic grocery bags in Washington state, and the other would ban petroleum-based plastic bottles. And, the Senate took a look at a proposal that would consolidate the healthcare benefits of K-12 public school employees under one insurance plan.

Watch Wednesday’s Legislative Review here.

Thursday: A bipartisan group of lawmakers held a press conference to announce their plans for education reform, including a bill that would authorize charter schools in Washington state. Rep. Joe Fitzgibbon, D-Burien, held a press conference to promote his version of a bill that would ban plastic bags. The employment department and chief economist Arun Raha gave an update on how the state’s economy is doing.

Watch Thursday’s Leglative Review here.

Friday: The Sandusky scandal prompted the Senate to hear a bill that would hold certain higher education employees responsible for reporting suspected child abuse. Also, the Senate honored Sen. Scott White, who died in October of a heart attack. Friday’s edition of Legislative Review airs at 6:30 p.m. on TVW.

Tags: Arun Raha, Environment, gay marriage, Gov. Gregoire, Legislative Review, Schools

The Senate committee on economic development is looking at the state of the state’s economy today.

When it comes to unemployment, Washington is somewhere in the middle of the pack. The smallest states — North Dakota, Nebraska, South Dakota, New Hampshire and Vermont — have the lowest unemployment, ranging from 3.4 percent to 4.5 percent. Washington’s unemployment, however, is about double that.

“The industries most affected by the recession are associated with housing, financial services, construction,” said Greg Weeks, director of the Employment Security Department. He said the pattern of the “tepid” recovery has been lead by a 15,000 job gain in manufacturing in the last year. Government, however, has been a drag — losing thousands of employees.  “The recession started and was hitting private industries first … and as they start to come out, then the tax ramifications of those cuts hit the public sector,” leading to job reductions in state and local governments.

State job recovery has been below par, Weeks said. “This recession has just hammered our state and we’re recovering slowly,” he said.

After Weeks was finished, Arun Raha, the state’s top economist — who announced that he’s leaving at the end of the month — presented. “What we said in the November forecast is coming true,” he said.

“If I had to make the forecast today … I would not anticipate having to make any significant up or down revisions” from the previous forecast, he said. (more…)

Tags: economy, unemployment

Washington’s chief economist Arun Raha announced today in a press conference that he is resigning Jan. 31 to take a new job in the private sector.

Since taking office three years ago amid the Great Recession, Raha’s quarterly economic forecast reports haven’t exactly been rosy. “It was a challenge and any job I have after this will be a piece of cake,” said Raha, who is taking a position as an economist for manufacturing firm Eaton Corporation in Cleveland, Ohio.

“Two good things come from me leaving. One, I’m getting an out-of-state company to buy my house, ” Raha joked. “The second is that we’ve been on target since September, and I get to quit while I’m ahead.”

Raha is executive director of the Economic and Revenue Forecast Council, and the announcement comes weeks before he is due to give the state’s February revenue forecast. As forecaster, Raha is responsible for predicting how much money the state will bring in, as well as painting a picture of the overall economy. The state Legislature uses his forecasts as a blueprint for writing the budget.

Rep. Ed Orcutt, Chair of the Washington State Economic and Revenue Forecast Council, said that Steve Lerch will take over as interim forecaster and will deliver the February forecast. Raha has promised to be available to Lerch so that the transition is “seamless” as possible, Orcutt said.

The council will launch a national search for Raha’s replacement, which could take as long as six or seven months, Orcutt said. In 2010, the most recent year for which data has been released, Raha earned $140,833 in salary.

Raha said that he feels comfortable leaving before February’s forecast because he doesn’t see much changing from his November projections. Revenue updates will be published today, he said, and the forecast is .03 percent off, or about $9 million dollars below projections. “I don’t see any reason to change it upward or downward from November,” Raha said, adding there is plenty of time for things to change before the February forecast.

Tags: Arun Raha, Budget, economic forecast

Arun Raha, the state’s forecaster and chief economist, is leaving his job after three years. Check out Jordan Schrader’s blog about it at the Tacoma News-Tribune. TVW will be live with Raha’s press conference at noon, and we’ll post more on the blog from the event.

Tags: Arun Raha

On the heels of this morning’s not-awful revenue forecast, the state also heard the latest jobs report. The good news: The state added 4,600 jobs in October and the unemployment rate is now the lowest it’s been since March 2009.

The bad news: The rate is 9 percent. And 314,698 people are still unemployed and looking for work in the state. Of those, about 176,000 were receiving unemployment benefits and nearly 65,000 unemployed workers have gone without a job for so long that they’ve simply run out of benefits.

According to the Employment Security Department, the industries with the biggest job gains were government, wholesale trade, education and health services, and manufacturing, which includes aerospace. But jobs were lost in professional and business services, transportation, warehousing and utilities, retail trade.

To view the full report, go here.

Tags: Jobs, unemployment

“These are not normal times,” said Arun Raha, the state’s top economist, in opening up his presentation on the Economic and Revenue Forecast (which you can watch live on TVW). “Fear and uncertainty have overwhelmed” consumer behavior, he said. Political gridlock in the other Washington has lead to uncertainty. And Europe’s economic troubles are affecting our own economy.

He said the probability of a double-dip recession has increased, though it’s too early to say if it will. Because of all these economic factors, Raha said he expects the state to take in $1.4 billion less in the two-year budget cycle than he estimated just last quarter.

“There are still over 6 million fewer jobs nationally than there were at the start of this recession,” he said, illustrating the term “jobless recovery.”

Raha said even though most of those in the audience weren’t surprised by the forecast, it’s still “truly troubling.” He said the best he can hope for is that we don’t slip into another recession.

In the Q&A portion, lawmakers said there may be a need for a brief special session to handle the lack of revenue.

Tags: Budget, economy, Revenue forecast

Gov. Chris Gregoire just sent out a congratulatory note to Boeing on the occasion of its 787 Dreamliner being certified. She said the “incredible milestone” marks “a new chapter in the company’s long history that will include one of the most innovative an fuel-efficient airplanes in the world.”

She also said she looks forward to the company’s first delivery of that plane next month to Nippon Airways.

She said Washington state is and will remain a global aerospace hub, with 84,000 aerospace workers on the forefront of innovation. She said she’s committed to maintaining that industry here.

Tags: 787, boeing, Dreamliner, Governor Gregoire

Budget director Marty Brown is asking state agencies to submit more proposed cuts.

The state budget picture must not be looking good: Marty Brown at the Office of Financial Management has sent out a memo on behalf of Gov. Chris Gregoire asking all state agency directors to submit a proposal for 5 percent “first priority” cuts — and an additional 5 percent cut for a total of 10 percent.

The reason? Brown says in the memo that the “near-term economic outlook has weakened since June,” when the last Economic and Revenue forecast was issued. And he says there’s a “distinct possibility” that further revenue losses are on the way in the coming year.

And what will those cuts look like? The Washington Policy Center has the chart from OFM here.

The agencies were asked to assume a January start date for cuts that couldn’t be implemented immediately. And they were warned that, as OFM monitors the economic conditions, the target could be revised.

The next ERFC Economic Review is on Sept. 2 at 2:30 p.m. TVW will cover that, as usual. And we’ll be there two weeks later for the Sept. 15 Economic and Revenue Forecast – when we’ll find out if the forecast is indeed down. But that’s not all:  Before session, we’ve also got the November forecast to deal with.

Tags: Budget, cuts, economy, OFM