On election night, the Seattle Times reported that I-2109, I-2117, and I-2124 had been rejected. The story added that the results “mean that Washington’s Legislature will likely avoid a major budget shortfall in the upcoming legislative session.”

That is not accurate. Our estimate of the substantial projected operating budget shortfall did not assume passage of these initiatives.

There are still a lot of unknowns, but our estimate—based on the maintenance level spending requests from agencies—is that the cost of continuing current services into 2025–27 (and funding the collective bargaining agreements) will exceed currently expected resources by about $5 billion. (This shortfall is projected even as 2025–27 revenues are forecasted to exceed 2023–25 revenues by $5.132 billion.)

There are two more revenue forecasts and two more caseload forecasts before the next operating budget is adopted. Additionally, the Legislature and the Office of Financial Management will be combing the agencies’ maintenance level requests to ensure that they don’t include items that should be considered new policy. (I’ve already identified some examples.)

Had I-2109 and I-2117 passed, they would have worsened the estimated operating budget shortfall. Their rejection underscores that this is not a revenue shortfall. Instead, it is the result of the Legislature’s prior budget decisions, including its choice to increase appropriations for 2023–25 by 15.8% at a time when revenues were expected to increase by just 3.5%. (We outlined these choices here.)

When the Times claims that the Legislature will avoid a major budget shortfall, perhaps they are thinking of the transportation budget. A portion of the proceeds from the carbon emission allowance auctions (which would have been repealed by I-2117) are dedicated to the 2022 transportation revenue package, so I-2117 would have had a major impact on the transportation budget.

Even there, however, the state faces serious budget challenges that are not changed by the election results. We wrote in depth last year about the transportation budget’s long-term funding challenges. The enacted 2024 supplemental transportation budget balanced over a shorter time frame than usual. Then, the September transportation revenue forecast estimated that transportation revenues (not including carbon auction proceeds) would be significantly lower going forward than assumed in the current budget.

Altogether, although the election results are surely a relief for operating and transportation budget writers, they don’t change the underlying budget problems.