A revenue forecast released today shows economic growth in Washington is slow but steady and may prove strong enough to drive state lawmakers to an elusive agreementon the state budget in time to avert a government shutdown.

Chief economist Steve Lerch issued a report today predicting the state will collect $32.7 billion in tax revenues between July 1 and June 30, 2015, which is $121 million more than his last forecast in March.

The bump in revenues may enable the House and Senate to reach a deal that erases a projected billion-dollar shortfall, satisfies a Supreme Court order to beef up public school funding, establishes an adequate reserve and resolves several policy differences.

Also today, a separate report predicts the state will spend $90 million less on costly public services because of a drop in demand for them.

In spite of the two reports, House Democrats are refraining from sounding too optimistic because several hurdles remain.

The Senate majority is pushing an omnibus reform bill for public schools and an expansion of eligibility rules for obtaining structured settlements under the worker’s compensation program. The Senate passed the education reform bill last week but hasn’t acted on the other legislation yet.

Another sticking point is taxes. Senate Republicans continue to oppose attempts by House Democrats to raise money by revising tax laws governing the telecommunications industry and end a longstanding exemption allowing out-of-state residents to skip paying sales tax if the state they live in, like Oregon, doesn’t have a sales tax.

On Monday, some in the Senate majority expressed a willingness to drop their policy bills if House Democrats do the same with those revenue bills.

Last week, the Senate did approve an estate tax bill considered a legislative fix in response to a Supreme Court ruling. The decision saved $160 million for the budget plan lawmakers are currently trying to reach agreement on. Tom said that could be the only tax bill if there is enough new revenue in today’s forecast.

Preparations continue for a potential powering down of state government.

Inslee’s budget office is trying to figure out which services and programs may be halted and which may be considered vital and necessary and thus keep operating.

Layoff notices could go out as early as Friday to some of the roughly 59,000 state workers, according to a spokesman in the governor’s budget office.