At its quarterly meeting last Friday, the state Economic and Revenue Forecast Council (ERFC) updated its forecasts of state revenues. These new forecasts increase the amount of revenue expected over the current and next bienniums combined by a total of $29.9 million.

Budget reports from legislative fiscal committees typically roll up four accounts: the general fund–state, the education legacy trust account, the Washington opportunity pathways account, and the workforce education investment account. Budgeteers refer to this roll-up as “funds subject to the outlook” (NGFO). Under the state’s four-year balanced budget requirement, positive ending balances are required for both the current and the following bienniums for the NGFO overall.

For the NGFO, the forecast for the current 2023–25 biennium decreased by $49.2 million to $66,479.2 million. The forecast for the 2025–27 biennium increased by $79.1 million to $71,661.3 million. The forecast for the 2027¬29 biennium increased by $96.1 million to $76,976 million.

From 2021–2023 to 2023–25, the forecasted NGFO growth is 2.7%. From 2023–25 to 2025–27, the forecasted NGFO growth is 7.7%. From 2027–25 to 2025–29, the forecasted NGFO growth is 7.5%.

As always, the ERFC also adopted optimistic and pessimistic alternative revenue forecasts for the general fund–state (which produces 95% of total NGFO revenue). Under the optimistic scenario, revenue exceeds the baseline forecast by $1,774 million during 2023–25 and by $5,417 million during 2025-27. Under the pessimistic scenario, revenue falls short of the baseline forecast by $1,962 million during 2023–25 and by $6,037 million during 2007–09. The ERFC assigns a 20 percent probability to the optimistic scenario and a 25 percent probability to the pessimistic scenario.

ERFC will next meet to update the forecast on November 20th. Gov. Inslee will base his recommended budget on that updated forecast. Ultimately, the legislature will base the budget it passes during the 2025 session the forecast that ERFC adopts at its March meeting. A lot can change between September and March.

The handout from the meeting is here; TVW video of the meeting is here.