Blog

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 […]

State continues to treat working families tax credit as a spending program instead of a revenue reduction (plus, remittances to date)

This is the first year in which low-income Washingtonians can claim the working families tax credit (WFTC). According to the Department of Revenue (DOR), through May 15, the state has returned $83 million to 175,886 taxpayers. The 2023 supplemental operating budget appropriates $221.0 million for WFTC remittances in FY 2023. (And the fiscal note for […]

Operating budget vetoes add about $15 million in NGFO spending

Last week, Gov. Inslee signed the 2023 supplemental and 2023–25 operating budgets. He vetoed several provisions. Altogether, it appears that his vetoes increase appropriations from funds subject to the outlook (NGFO) by a net of $14.9 million. In the 2023–25 budget, the governor vetoed $1.6 million in NGFO appropriations and $5.1 million in assumed NGFO […]

The state has appropriated over $400 million related to the Blake decision

On Tuesday, the Legislature held a special session to pass 2E2SSB 5536, a drug policy bill that is in response to the 2021 state Supreme Court decision in State v. Blake. (The Court held that the state’s drug possession law was unconstitutional because the state did not have to prove intent in order to convict.) […]