Despite relatively good financial news over the past several years, Washington’s budget still has not fully recovered from the financial crisis. According to a new report released by the Pew Charitable Trust, revenues are still down 2.3 percent compared to what they were in 2008 when adjusted for inflation.
It’s not that our economy is not doing well. We are consistently rated one of the best states for business and have the lowest unemployment rate since the start of the recession: 5.6 percent. The more likely cause is a tepid increase in consumer spending, which hurts Washington’s sales tax-dependent budget.
This chart from the Washington State Budget and Policy Center also shows how state resources remain at pre-recession levels.
This news comes as the legislature continues to grapple with a multi-billion dollar obligation to increase K-12 spending. The Washington State Supreme Court ruled in 2012 that we are not meeting our constitution obligation to fully fund our education system.
Washington is among 29 states whose tax revenues still have not returned or exceeded pre-recession levels. Alaska has had the worst recovery – down 69 percent from peak revenue – while North Dakota’s oil boom spurred a 119 percent increase in state revenues. Nationwide, state government revenues have increased by 1.6 percent.