Revenue forecast sees $1.2 billion shortfall

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OLYMPIA — Washington’s budget shortfall has grown to $1.2 billion, officials said Wednesday, as increased reliance on government services overpowered relative stability in the state’s economy.

The state Economic and Revenue Forecast Council cited higher-than-forecast expenses in areas like Medicaid as the cause of new budget trouble. Government revenues remained stable, something Gov. Jay Inslee’s budget director cited in calling the forecast relatively good news.

“It could have been worse,” said David Schumacher, director of the Office of Financial Management.

Forecasters say the revenues for the next budget cycle could still fluctuate dramatically in either direction. A variety of outside economic forces could help or hurt the state, including how Congress handles its recent budget cuts, Europe’s economic troubles and whether the Chinese economy slows down.

Budget writers entered the year with a roughly $1 billion shortfall and had expected the numbers may get worse. The Legislature is separately under court order to add more money — perhaps another $1 billion — to K-12 education.

Lawmakers are expected to release their budget proposals in the coming weeks.

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