Friday, November 18, 2005 - Page updated at 12:00 AM

Sizzling economy to give state reserves hearty boost

The Associated Press

OLYMPIA — Washington's hot economy, still surging with a mighty assist from construction and real-estate sales, will boost state coffers by more than $300 million, forecasters said Thursday.

But Gov. Christine Gregoire and key legislators cautioned against a spending spree in the upcoming legislative session.

"There's a lot of risk out there," said state budget director Victor Moore.

It's a tempting target: The new revenue update brings the state's reserves to more than $1.4 billion, roughly 5 percent of the state budget.

Chief economist Chang Mook Sohn's new analysis for the state Revenue Forecast Council presumes a cooling of the red-hot housing market and consumer spending, and projects continuing high oil prices.

"There are many signs that housing is peaking," he said. "We have been expecting that for a long time."

Sohn's new forecast now projects more than $26.3 billion in revenue.