At its quarterly meeting today, the state Economic and Revenue Forecast Council (ERFC) updated its forecast of state revenues. This is the third official forecast to incorporate the impact of the COVID-19 pandemic.

In recent years, budget reports from legislative fiscal committees have typically rolled up three accounts: the general fund–state, the education legacy trust account and the Washington opportunity pathways account. Budgeteers refer to the roll-up as “funds subject to the outlook” (NGFO). Under the four-year balanced budget requirement, positive ending balances are required for both the current and the following bienniums. Since July 1, the balanced budget requirement includes a fourth account, the workforce education investment account (WEIA).

For the NGFO as now defined, the new forecast for the 2019–21 biennium is $50,994.7 million; this is $633.8 million more than had been estimated in September, when the ERFC last met. The forecast for the 2021–23 biennium increased by, $328.4 million to $54,666.2 million.

The September forecast increased 2019–21 NGFO revenue by $2,238.6 and increased 2021–23 NGFO revenue by $2,419.3 million. From 2017–19 to 2019–21, the forecasted NGFO growth rate is 10.7%. From 2019–21 to 2021–23, the forecasted NGFO growth rate is 7.2%.

As always, the ERFC also adopted optimistic and pessimistic alternative forecasts for the general fund–state. Under the optimistic scenario, revenue exceeds the baseline forecast by $1,257 million in 2019–21 and by $3,943 million during 2021–23. Under the pessimistic scenario, revenue falls short of the baseline forecast by $1,312 million during 2019–21 and by $4,122 million during 2021–23. The ERFC assigns a 25 percent probability to the optimistic scenario and a 25 percent probability to the pessimistic scenario.

In an upcoming post, Emily will provide her analysis of the new forecast’s effect on the outlook for the 2021–23 budget.

The handout from the meeting is here; TVW video of the meeting is here.