Blog

Happy Fiscal New Year’s Eve!

Today is the last day of state fiscal year 2023 and the last day of the 2021–23 biennium. Tomorrow is the first day of the 2023–25 biennium, which comprises fiscal years 2024 and 2025. The operating budget and other legislation enacted this year appropriated $69.804 billion from funds subject to the outlook (NGFO) for 2023–25, […]

No paid family and medical leave deficits in sight, after cash influx from state general fund

The paid family and medical leave program has been in deficit several times since Spring 2022. (Our report about the program’s problems is here.) The monthly ending balance of the family and medical leave insurance (FMLI) account has been negative six times, including this April (see the chart below). At the April meeting of the […]

Washington’s average annual wage grew much slower in 2022 than in recent years

The Employment Security Department (ESD) reports that the state average annual wage was $84,167 in 2022. That is just 2.0% higher than the 2021 average wage. In 2020 and 2021, there were record high increases in the average wage (see the chart below). According to ESD, the growth in the average wage slowed because “[a] […]

Forecast of state revenues increased

At its quarterly meeting today, the state Economic and Revenue Forecast Council (ERFC) updated its forecasts of state revenues. These new forecasts increase the amount available over the current and next bienniums by a total of $667.3 million. Budget reports from legislative fiscal committees typically roll up four accounts: the general fund–state, the education legacy […]

Times understates the state spending increase on schools related to the McCleary decision

The Seattle Times provided a fairly good overview Sunday of school funding and why some districts are dealing with budget shortfalls. However, they understated the spending increases related to the McCleary decision. The Times writes, “The state spent about $9 billion a year on education a couple years before the overhaul — dubbed the ‘McCleary […]

New brief: Seattle’s Payroll Expense Tax is Highly Concentrated and Shaping Up to Be a Volatile Revenue Source

The City of Seattle adopted the payroll expense tax (PET) in July 2020. The rate of the tax varies from 0.7%–2.4% depending on the total payroll expense of a business and the amount of an employee’s compensation. The PET is the city’s fourth-largest tax source, behind property, business and occupation, and retail sales taxes. In […]

Washington received an estimated $2.743 billion from the enhanced federal match for Medicaid

During the pandemic, the federal government has been providing an enhanced federal match for Medicaid. Typically, the federal government pays for 50% of Medicaid spending in Washington, and the state covers the other half. (A higher match is in place for some Medicaid clients, pursuant to the Affordable Care Act.) The enhanced pandemic federal medical […]

Capital gains tax revenues, school construction, and volatility

As I wrote last month, capital gains tax collections for FY 2023 were significantly higher than forecasted. By statute, the first $500 million collected in a year will go to the education legacy trust account (ELTA), a fund subject to the outlook (NGFO). Anything over that will go to the common school construction account (CSCA). […]

Including vetoes, the 2023–25 operating budget leaves an unrestricted ending balance of $23 million in the outlook

Today the Economic and Revenue Forecast Council approved an official budget outlook based on the 2023–25 operating budget. It includes the impacts of the governor’s vetoes and the appropriations in 2E2SSB 5536 (the drug policy bill that was adopted during the May 16 special session). As passed by the Legislature on April 23, the budget […]

Capital gains tax collections have come in higher than anticipated

The state’s March 2023 revenue forecast assumes that capital gains tax revenues will total $248.0 million in fiscal year 2023 (which ends on June 30). All of that would go to the education legacy trust account (ELTA). By statute, the first $500 million (adjusted for inflation annually) in collections goes to the ELTA (which is […]