Washington economy could shrink drastically in coming months

MOSES LAKE — Washington state’s economy could be poised to shrink by around 25 percent in the second quarter of 2020, according to a presentation by the Washington State Economic Revenue Forecast Council.

“This is devastating,” said Sen. Judy Warnick, R-Moses Lake, who reviewed portions of the presentation Thursday afternoon during a webinar organized by the Grant County Economic Development Council, or EDC.

“This is very sobering,” Warnick added.

Prior to the COVID-19 outbreak, which prompted Gov. Jay Inslee to issue proclamations closing schools and “non-essential” businesses statewide as well as banning large gatherings, the council had expected the state’s economy to grow 1.9 percent for the three months beginning with April.

Created by the council’s chief economist and executive director, Steve Lerch, the presentation cited forecasts by Blue Chip Publications, The Wall Street Journal and financial analysts IHS-Markit that all estimated the state’s economy would contract by 25 percent this quarter as businesses shuttered, people lost jobs and consumer spending collapsed.

Prior to this, the presentation said the worst performance by the state’s economy was the second quarter of 1958, when it shrank by 10 percent during that year’s sharp, worldwide recession.

The Economic Revenue and Forecast Council is made of members of the state legislature, gubernatorial appointees, and the state treasurer. It develops economic and tax revenue projections for the state budget.

Warnick also said she was frustrated by Inslee’s refusal to give a coherent answer as to why private home construction is currently banned but public construction is allowed, or that fishing is still prohibited.

“It’s very frustrating that the governor has not opened residential construction,” she said. “You cannot build a home, but we can build that hockey stadium in downtown Seattle.”

Warnick said legislative leaders have tried to meet with the governor, but that his staff keep “pulling back.” She was also concerned that the governor’s “plan” to reopen the state offered no concrete proposals as to what might happen when.

“It’s frustrating,” she repeated.

But Warnick said she also appreciated that Inslee has “a tough job” representing the whole state, not just its east or west sides. A partial reopening of the state, or loosening restrictions in some regions but not others, would also potentially lead people to stampede to open regions, Warnick added.

“It would have a dramatic effect if fishing was opened here but not on the West Side,” she said.

Charles H. Featherstone can be reached at [email protected].