Blog

January report on state tax collections: revenues for the most recent month exceeded forecast by $88 million

Yesterday the state’s Economic and Revenue Forecast Council (ERFC) issued its monthly report on general fund revenue collections. This report covers payments received between December 11 and January 10 for the sales tax, the use tax, the business and occupation tax, the public utility tax, the tobacco products tax, and penalties and interest (collectively the […]

Washington is expected to have extraordinary revenue growth this biennium—it should be saved

In 2011, voters approved a constitutional amendment that requires a portion of any extraordinary revenue growth (EORG) to be deposited in the budget stabilization account (BSA, or the rainy day fund). This is a good budget practice because it forces the state to save extra money when revenues are especially high rather than unsustainably increasing […]

New brief: The State Should Avoid Tapping Reserves While Revenues Are Growing

A potential recession is a major risk to the state revenue forecast, but Washington’s strong budget sustainability practices—including the budget stabilization account (BSA, or the rainy day fund)—will help the state through a downturn. However, in 2021, despite not facing a revenue shortfall, the Legislature swept the BSA. (Pursuant to the constitution, this required only […]

Gov. Inslee proposes a historically large $4 billion bond referendum to reduce homelessness, on top of historically large regular capital bond bill

The biggest-ticket policy item in Gov. Inslee’s budget proposals is $4 billion in bonds for homelessness and housing programs, which would have to be approved by voters. State debt is limited by the state constitution. Under Article VIII, Section 1, the principal and interest payments on the state debt cannot exceed 8.25% of average general […]

Governor would fund Washington student loan program and shift more of its funding from the general fund to the workforce education investment account

In 2022, the Legislature enacted E2SHB 1736, which creates the Washington student loan program. Many program details were left to be determined later, with recommendations due from the Washington Student Achievement Council by Dec. 1, 2022. (The report has not yet been published.) However, E2SHB 1736 did specify that loans will not be issued unless […]

Gov. Inslee’s budget proposal would continue to fund the working families tax credit; two prefiled bills would make changes to the program

On Inside Olympia last month, Gov. Inslee talked about his budget proposals and said, “In fact, we’re actually doing a tax cut in this budget because it funds the working families tax credit. So 400,000 Washingtonians will get a tax cut starting February 1, if they apply for it.” The governor isn’t referring to a […]

What inflationary increase will be funded when school salaries are rebased this year?

Although almost half of the new policy spending in Gov. Inslee’s 2023–25 budget proposal would be used to increase employee compensation and provider rates, a relatively small portion of that would be for school employees. The state increased allocations for school salaries as part of its response to the McCleary decision on school funding (beginning […]

The enhanced federal Medicaid match will phase down and end on Dec. 31

The federal fiscal year 2023 consolidated appropriations act (passed by Congress on Dec. 23 and signed by the president on Dec. 29) includes a final deadline for the enhanced federal match for Medicaid that has been in place since early in the pandemic. Because this enhanced federal match supplants state funds for Medicaid, Washington has […]

Increased employee compensation and provider rates make up almost half of proposed new policies for 2023–25

Under Gov. Inslee’s proposed 2023–25 operating budget, appropriations from funds subject to the outlook (NGFO) would increase by $4.854 billion to fund new policies. (The cost of continuing current services is expected to increase by an additional $1.401 billion.) Many of the new policy proposals are related to employee compensation or increasing the rates paid […]

Policy reductions in the governor’s 2023 supplemental would help to balance the 2023–25 budget

Gov. Inslee’s 2023–25 operating budget proposal is funded via the increased revenue forecasts since the current budget was adopted and a transfer of $2.1 billion in reserve funds (from the Washington rescue plan transition account) to the general fund–state (GFS). Policy level reductions in the proposed 2023 supplemental to the 2021–23 budget also help to […]