June 17, 2020



Source: ShiftWA.org

The Washington State Economic and Revenue Forecast Council released its Economic Forecast and the COVID-19 outbreak has had an even greater negative impact on the state’s revenue than previously reported.  For the past few weeks Washington State officials have been saying the economic shutdown will cost the state $7 billion in revenue over the next three years.  The latest forecast projects that the state will lose nearly $9 billion in revenue ($4.6 billion during the current budget through next June, and $4.4 billion during the 2021-2023 biennia).   (Washington State Economic and Revenue Forecast Council)

Governor Inslee proposes eliminating a scheduled 3% pay raise for some management and the few non-union state employees, while still giving a second pay raise to union employees (though having them take a few unpaid days off to maintain current payroll expenditures next year).  After the pay raise is implemented, union employees will take one day off per week for four weeks, then take one day off during each of the next three or four months.  Why would the governor use a complicated method to maintain current payroll expenditures?  By allowing the pay raise, employees increase their base salary which current benefits and future pay raises are based on.  While this furlough method will save some money during the current budget cycle, it will not reduce future state expenditures (including in the 2021-2023 biennial budget, which is projected to have revenues $4.4 billion dollars smaller than previously projected). Also, remember that while private sector wages have been severely impacted by the economic shutdown, nearly all state employees have received full wages and benefits during the crisis. (Seattle Times)

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