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Dear Friends and Neighbors,

We keep hearing that our economy is slowly improving, yet our state unemployment numbers don’t give us full confidence in this assessment. Also, let’s not forget about the people who are underemployed or fearful that they could lose their jobs.

One of my priorities as a state representative is strengthening our economy. When people have jobs, their personal incomes rise and they are able to provide for their families. This, in turn, helps with tax collections – revenues that allow our state to pay for important things such as K-12 education, public safety and services for our most vulnerable citizens. When the economy is strong, it’s a win-win for families and those who rely on state services.

Four times a year, our state produces a report on its economy and revenue (tax collections). The Washington State Economic and Revenue Forecast Council (ERFC) released this quarterly report on Sept. 18. This is a detailed document. If you don’t have the time to look over it, here is a snapshot:

State economy

  • In the two months since the June forecast was adopted, our state added 10,900 jobs – 3,500 more than the 7,400 expected.
  • Construction has become our state’s fastest-growing industry, with growth of 11,000 jobs (8 percent) over the last year.
  • The recovery in jobs since the recession has been concentrated in the Seattle area. Note: the Seattle Metropolitan Division is defined as King and Snohomish counties.
  • The Institute for Supply Management – Western Washington Index continues to indicate positive, but possibly slowing, growth in the broader manufacturing sector. Manufacturing employment growth has slowed now that aerospace employment is declining. It’s expected that aerospace employment will have a downward trend over the next few years.
  • Our state’s exports grew 15 percent from the second quarter of 2012 to the second quarter of 2013. Exports of transportation equipment (mostly Boeing planes) increased 42.4 percent over the year, but exports of agricultural products fell 49.9 percent. Exports from all other Washington industries rose 6.7 percent over the year.
  • Housing construction dropped sharply in the second quarter of 2013 after rising rapidly throughout 2012 and early 2013.

State revenue

  • Our state collects various taxes and fees, and uses this revenue to pay for state government and other financial obligations. Some of the largest revenue streams include: retail sales and use tax; business and occupation tax; property tax; real estate excise tax; public utilities tax; cigarette and tobacco taxes; and liquor, beer and wine taxes. For a complete list of state revenue, click here.
  • Our state revenue grew 8.7 percent between the 2009-11 and 2011-13 budget cycles, and is expected to grow 7.6 percent between the 2011-13 and 2013-15 budget cycles.
  • Since the June forecast, our state revenue for the 2011-13 budget cycle is up $23 million.
  • The September forecast for the 2013-15 budget cycle is $345 million higher than in June.
  • The September forecast for the 2015-17 budget cycle has been increased by $342 million.

Operating budget surplus

It has been a long time since state lawmakers had to contemplate what to do with an operating budget surplus. This promises to be an issue that will be debated in the 2014 legislative session and the months leading up to it.

I believe the Legislature should put some of this extra revenue aside in preparation for another economic downturn. This is the responsible thing to do. We should also look to dedicate some of this revenue to K-12 education – to satisfy the clear mandate from Article IX of our state constitution and meet the expectations from our state Supreme Court’s McCleary decision. Our state should also pay down the unfunded liabilities in its pension system. The longer we wait to pay these bills, the more it will cost us in the future.

In your service,

Dan Kristiansen

State Representative Dan Kristiansen, 39th Legislative District
426A Legislative Building | P.O. Box 40600 | Olympia, WA 98504-0600
(360) 786-7967 | Toll-free: (800) 562-6000