Most state agencies have now submitted their 2023–25 operating budget requests to the Office of Financial Management (OFM). If the requests were adopted as is by the Legislature, they would increase general fund–state (GFS) spending by 28.5% over 2021–23. (For context, the Economic and Revenue Forecast Council estimates that GFS revenues will increase by 3.4% in 2023–25.)

The budget requests are incomplete and preliminary. That said, they provide a glimpse at some of the policy ideas the Legislature will be considering next year. They also suggest that many agencies did not take OFM’s budget instructions to heart. OFM had noted, “It is essential that agencies consider the state’s long-term fiscal outlook in developing their 2023–25 budget requests. Washington’s economy is cyclical, and the current growth cycle will eventually slow.”

First, a little background: The state operating budget is composed of the carry-forward level, the maintenance level, and the policy level. The carry-forward level (CFL) essentially moves current funding into the next biennium, after removing one-time spending items. OFM calculates the CFL.

The maintenance level (ML) adjusts the CFL to reflect changes to caseload, enrollment, and inflation. The ML is first estimated by agencies, but it is refined throughout the budget process.

The maintenance level change is added to the CFL to yield the ML. So when we talk about the maintenance level, we are typically incorporating carry-forward and maintenance changes. New policies are then added on top of the ML to create the policy level (PL). This is the total amount that is appropriated. (OFM has more details on these terms here.)

The agency requests are presented in terms of the general fund–state (GFS), not funds subject to the outlook (NGFO). The agencies that have submitted requests for 2023–25 represent 89.9% of 2021–23 GFS appropriations. Altogether, the maintenance level (including both carry-forward and maintenance changes) for 2023–25 would increase by 9.0% if these requests were enacted. The policy level for 2023–25 would be up 28.5%. This includes carry-forward changes of $2.444 billion, maintenance changes of $2.499 billion, and policy changes of $10.680 billion. (The official outlook for the enacted 2022 supplemental to the 2021–23 budget estimated that the maintenance level of the budget would increase spending by 1.1% in 2023–25.)

The agency requests do not evenly incorporate caseload and enrollment changes. For example, the Department of Corrections and the Department of Social and Health Services include caseload estimates from the June caseload forecast in their maintenance levels. Meanwhile, the Health Care Authority; Department of Children, Youth, and Families; and public schools include no caseload changes at all—they are waiting for the November caseload forecast. To the extent that higher caseloads are forecast in November than were expected in February, the maintenance level estimates in the agency requests would be too low.

Even though it is not complete, the amount that has been requested represents a 28.5% increase over enacted 2021–23 appropriations. As Chart 1 shows, this is the second largest amount requested by agencies (going back to at least 2005–07).

Typically, the Legislature adopts a budget that appropriates less than had been requested by agencies. However, as shown in Chart 2, the Legislature appropriated more than agencies asked for in the last biennial budget and this year’s supplemental (and four earlier supplementals going back to 2004).

If the Legislature were to appropriate just what has been included in agency requests so far, the 28.5% increase would be the largest change in appropriations from one biennium to the next going back at least to the mid-1990s. And that would be after a historically high 24.3% increase in 2021–23.

The agency requesting the largest spending increase is, not surprisingly, public schools. (Public schools account for 42.6% of the 2021–23 budget and 42.0% of the requests for 2023–25.) But some agencies are requesting more than their size would suggest. For example, the request of the Department of Children, Youth, and Families represents 8.1% of the total requests but the agency only accounts for 3.6% of the current budget. Chart 3 shows the amount of spending increases requested by the 25 largest agencies (measured by their GFS budgets in 2021–23). I’ll be writing about some notable agency requests in upcoming posts.

The governor will consider these requests as he develops his budget proposal, which will then be considered by the Legislature. There are still two revenue forecasts and two caseload forecasts between now and when legislative proposals are made.