Oregon Public Broadcasting

Eight billion dollars. That’s Washington state’s newly revised projected budget shortfall. It means majority Democrats in the legislature will either have to cut nearly a quarter of the state budget or ask voters to approve a tax hike.

That last scenario now seems all but certain. Olympia correspondent Austin Jenkins reports.

Lawmakers got the bad news from state economic revenue forecaster Arun Raha. He told them after his last forecast in November, Washington’s economy “hit the wall:” layoffs at Microsoft and Boeing, a dismal holiday shopping season and a huge slump in auto and home sales.

Raha calls it an unprecedented perfect economic storm. 

Arun Raha: “This is a consumer led recession and until confidence returns and spending returns will continue to suffer.”

Raha expects Washington’s economy to bottom out mid-year and then begin a slow recovery. But he says the real recovery and the effects of the federal stimulus won’t be felt until 2010.

Key Democrats in the legislature say they plan to write a no-new-taxes budget. But then almost surely give voters the chance to buy back programs by voting for a yet-to-be determined tax increase.