This week was the first anniversary of what many consider the event that marks this recession — the collapse of Lehman Brothers and the subsequent buyout of Merrill Lynch by Bank of America.

    On that day the Dow Jones industrial average dropped 504 points. Eventually, the Dow bottomed out, hitting a 12-year-low in March.

    Since then the Dow has soared 47 percent. The Dow ended up this week at its highest point in almost a year. Fed chief Ben Bernanke declared the recession is “very likely over.” August retail sales rose an unexpected but pleasant 2.7 percent.

    Yet we realize all is not rosy. Economists predict at best a slow return to economic prosperity, as opposed to a quick rise in employment, profits, home prices and the like. Jobs continue to drain, with unemployment predicted to continue to rise, just not at rates as high as recent months.

    Here in Washington state, the recession continues to affect government revenues.

    This week the state’s Economic and Revenue Forecast Council brought bad news: The state Legislature had expected its balanced, and trimmed, two-year budget would have $489 million in the bank when that budget ends in mid-2011. Instead, the new figures show the state will be in the hole by $430 million.

    The state Legislature now faces several choices: Come up with their own cuts to balance the budget, propose tax increases, wait for an improved revenue forecast (hoping for the best), or let the governor deal with it.

    Our state Rep. Gary Alexander, R-Olympia, is the Republican’s top expert when it comes to budget items. Rep. Alexander was clear in what he believes state government leaders should do.

    “While it may appear to some that our state economy is stabilizing, too many of our citizens are out of work. We continue to lose jobs, we’re spending more money then we’re taking in, and we’re continuing on the path toward another multi-billion dollar shortfall in the next state budget,” Rep. Alexander stated in a press release.

    Alexander offers specific actions that need to be taken: Require fiscal notes that detail the financial impacts before a bill passes; require a five-day waiting period before the Legislature votes on budgets; and institute constitutionally-protected spending limits. These seem reasonable, prudent requests that would create accountability to the state spending process.

    Some Republicans are asking for the governor to call for a special session to deal with the loss of revenue.

    Alexander said, and we agree, that the special session isn’t needed now, but legislators do need to start today in creating a supplemental budget ready when the Legislature opens at the start of the year, not at the end of the session.