Today the Economic and Revenue Forecast Council (ERFC) adopted the official budget outlook based on the 2018 supplemental operating budget. Unfortunately, TVW did not cover the meeting, but according to ERFC staff, there were no changes to the draft outlook.

The outlook incorporates the effects of Gov. Inslee’s vetoes. Total resources for 2017–19 are $12 million higher than expected in the pre-veto outlook produced by legislative staff, and for 2019–21 they are $34 million higher. This is mainly due to the fact that the legislative outlook assumed passage of HB 2437 (affordable housing sales tax), which would have reduced state revenues but was not ultimately enacted.

Policy level spending estimates are $49 million higher for 2019–21 after accounting for vetoes. The result is an unrestricted NGFS+ ending fund balance in 2019–21 of $88 million ($15 million lower than in the legislative outlook).

However, that positive ending balance comes with a significant asterisk: The outlook does not include the probable effects of Gov. Inslee’s veto of the professional learning day delay. As passed by the Legislature, the budget assumes savings from this delay of $27.1 million in 2017–19 and $75.8 million in 2019–21.

The budget outlook methodology explains,

The veto does not restore the savings assumed in the 2018 enacted budget so this Outlook includes these savings. However the veto makes it unlikely that the savings assumed will be achieved. The cost of restoring funding for the assumed savings will be reflected in the Outlook prepared in November, along with changes related to caseload and other standard adjustments, which will reflect the preliminary maintenance level budget. Because of the interaction with other policy changes made in Chapter 266, Laws of 2018 (E2SSB 6362), the current projected estimate of restoring these savings is $106 million during the period covered by this Outlook.

Thus, because the ending balance is estimated to be just $88 million in 2019–21 when ignoring the veto, the budget is most likely not truly balanced over four years.