State braces for huge budget hole as tax collections tumble

OLYMPIA — A new report issued Wednesday shows a crushing drop in tax collections amid the COVID-19 pandemic could sap state reserves and leave the governor and lawmakers with a billion-dollar hole to plug in the budget.

Receipts from sales, business, property and other taxes are expected to be $4.5 billion less than had been counted on for the current budget which runs through next summer, according to the revenue forecast issued by the state’s chief economist.

Even if the state drains its reserves, there will still be a $1.5 billion shortfall to erase in the coming months.

“This is a massive shortfall,” Gov. Jay Inslee said at an afternoon news conference. “We know we have many tough decisions ahead of us as a state as a result of our revenues falling off a cliff.”

And the picture doesn’t get much better for the ensuing 2021-23 budget. Collections are projected to be down another $4.3 billion with a potential deficit exceeding $6 billion, the report says.

The dour fiscal forecast spurred Inslee to block pay hikes for some executives and begin furloughs for state workers, and ignited a partisan row on when the 147 elected members of the Legislature should be summoned into special session to hash out solutions.

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