November 21, 2016
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New budget forecast predicts $354 million more in tax revenue than expected

The state received $354 million dollars in good budgetary news last week. Washington's coffers will collect $222 million more during the current budget period (2015-17) than predicted. In addition, the new Legislature that convenes Jan. 9 will have an additional $132 million more in tax collections than expected, according to the Washington State Economic and Revenue Forecast Council report released last Wednesday.

It's the latest in revenue forecast increases. Since the March forecast, the state's predicted revenues have increased by $842.5 million in the current biennium and $388.4 million in the next bienniuem. That's a predicted boost of $1.23 billion from what the state had expected to collect eight months ago.

The uptick in revenue comes from more sales tax collections. Overall, the tax revenue boost is "a pretty modest increase" when compared with a two-year budget that's expected to be more than $40 billion, said David Schumacher, director of the Office of Financial Management.

“It always helps, but it doesn’t solve the huge problems we’re facing,” Schumacher said.

The budget planning panel, which includes representatives from both parties and both chambers of the Legislature, tussled last week about whether their budget outlook report should include billions of dollars in new state spending to meet the Supreme Court's McCleary education funding ruling. Some have said the state will need to boost spending by $3.5 billion over two years to meet the 2018 funding deadline. A report issued last week didn't make the choice clear. Some estimates are lower, in the $2 billion range.

Republicans on the forecast council pushed back against including that higher number, saying it was a partisan attempt to influence discussion on the subject.

"Why are we making a number at all when we know we have more work to do?" said Sen. John Braun, R-Centralia. "Let's focus on the work and get the right outcome."

"There's not an existing statute, nor did the court put a dollar amount on this, nor is there a policy decision that has been made for us to rely upon to pin a figure down, such as the 3.5 billion dollars," said Rep. Terry Nealey, R-Dayton, a retired attorney and a member of the forecast council. "I think it would be an error for us to try to put a number down in the outlook or in a footnote."

In the end, the panel's Democrats and agency officials approved a budget outlook that calls for an additional $1.75 billion in 2017-19 and $3.5 billion in subsequent biennia to meet the McCleary court ruling.

The governor’s 2017-19 budget will be proposed by Dec. 20 and reports signal it will include the presumed cost of McCleary.

The News Tribune has more. The full Economic and Revenue Forecast Council report is available here.

For more on the revenue forecast, contact Eric Lohnes, AWB government affairs director for tax and fiscal policy.

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Focus on Sustainability

Feed Commodities LLC: Giving Unused Bakery Goods a New Life

This Tacoma company helps divert past-its-prime food from the landfill to ranchers, feeding cattle across the Northwest.

From Salem, Ore., to the Canadian border, Feed Commodities, LLC is the Pacific Northwest's premier recycler of bakery byproducts into livestock feeds. The company acquires otherwise unusable raw bakery goods around the Pacific Northwest to process at its Tacoma facility. Each month, the plant repurposes thousands of tons of bakery products that would otherwise end up in landfills, turning it into high-quality livestock feed sold in bulk to ranchers.

The company has also taken the lead in food waste reduction through the development of Normandy Waste Management Systems, a web-based software service designed to help the food production community learn how to track and reduce waste in their daily operations.

Read the full story in Washington Business Magazine
Time to Build Millennium Bulk Terminals

Still waiting for good jobs in Cowlitz County

By Mike Bridges, president of the Longview/Kelso Building and Construction Trades Council

Millennium's $680 million private investment stands to create more than 1,000 union construction jobs over a two-year build-out under a Project Labor Agreement. That's also 135 permanent jobs when the facility is complete and 2,650 direct and indirect construction jobs overall. And that doesn't count the ongoing maintenance work that would employ different trades for years to come. For Cowlitz County, this represents a significant private investment that would have an enormous economic impact on thousands of tradespeople and their families. All told, Millennium would bring in $43.1 million in state and local taxes during construction, and $5.4 million in state and local taxes each year when fully operational.

It would also mean fewer people on the road, working closer to home.

Right now, most of our tradesmen and women work outside of Cowlitz County. Many work out of state, driving home on weekends or once a month for visits. I get so tired of people criticizing these Millennium jobs as "temporary." Anyone in the trades knows our work is always "temporary." And for someone who drives thousands of miles each month to a job in Montana, visiting their kids once a month back home in Kelso, the promise of a local "temporary" job sounds pretty appealing...

Read the full column in The Stand
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