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Global uncertainty hits home | Editorial
One cannot understate the important role that Japan plays in the economic health of our region — now more than ever before.
The costs in human life and suffering, infrastructure collapse and cultural treasures lost cannot be counted. But if we cannot imagine the loss in those terms, thousands of miles away, one measure brings it all home.
Just when there were some signs of an improving economic situation, the state, nation and world are facing new circumstances that will affect jobs and lives for years to come.
The recent tax revenue forecast by Washington state’s chief economist, Arun Raha, indicates that the budget shortfall for this coming biennium will worsen. Tax collections are forecast to be down another $780 million, further deepening the projected deficit as lawmakers attempt to balance a state budget that could be short by as much as $6 billion.
The state’s chief economist said last Thursday, “The recent earthquake and tsunami disaster in Japan and the conflict in the Middle East are expected to help stymie the state’s economic recovery. Japan is one of the state’s biggest trading partners. Uprisings in several nations in the oil-producing Middle East have contributed to a spike in oil prices.”
And we thought we were already in trouble.
Raha noted perhaps the biggest difficulty is the unknown. “The uncertainties around oil prices and the tragedy in Japan are combining with the slow housing market to hold us back,” he said.
There are no easy fixes left. The governor’s warning about the danger of quick fixes rather than sustainable long-term solutions is revealing. The decision in 2002 to borrow $450 million through securitization of future tobacco settlement payments will affect the state budget for years to come. The action will ultimately cost the state $1 billion in principal and interest payments, and has resulted in the state receiving $100 million less per biennium in tobacco settlement fund. Surely it was a good decision at the time. But now?
It is has to be time now to implement a sales tax on online shopping.
Our fiscal crisis comes from actions and institutions both big and small. Seemingly tiny increases in pay each year, a steady growth in the demand for public services and simply the costs of doing business have all contributed in some way to the budget crisis.
Like every other state grappling with shrinking resources, concessions and cuts will and must rule the day. Workers’ pay and public programs and social services will be fundamentally changed. What can we do here? Much of what we are already doing: putting aside blame, giving where we can, reconfiguring expectations and remaining hopeful for the future.