The supplemental budget assumes passage of SSB 6614, which would reduce property taxes and also transfer $935 million from the general fund to the education legacy trust account (ELTA), thereby reducing funds in the budget stabilization account (BSA). (See yesterday’s post for more.)

I wondered yesterday why $935 million was chosen, as it seemed to have no connection to the fiscal impact of the property tax reduction.

In this morning’s House Finance Committee meeting, staff was asked where the $935 million figure comes from. The likely reasoning is:

• In 2017, the Legislature enacted EHB 2190 (with a supermajority), which amended RCW 43.79.496 to require that the extraordinary revenue growth (EORG) deposit to the BSA for 2017–19 be transferred to the general fund—not to exceed $1.078 billion.
• The official July 2017 outlook expected the 2017–19 EORG deposit to be $898 million.
• The official Nov. 2017 outlook expected the 2017–19 EORG deposit to be $1.096 billion.
• The outlook for the Senate-passed budget (based on the Feb. 2018 forecast) expected the 2017–19 EORG deposit to be $1.609 billion.
• So, from July to February, the EORG deposit estimate increased by $711 million.
• Under the constitution, three-quarters of any EORG must be deposited in the BSA. So, to keep about $700 million out of the BSA, $935 million would need to be transferred to the ELTA.

Otherwise, without a new three-fifths vote, the Legislature would not be able to transfer the EORG above $1.078 billion back to the general fund ($531 million).