Forecast of state revenues increased

By: Kriss Sjoblom
3:10 pm
November 19, 2021

At its quarterly meeting today, the state Economic and Revenue Forecast Council (ERFC) updated its forecasts of state revenues. These new forecasts add more than $1.9 billion to the amount available over the current and next bienniums.

Budget reports from legislative fiscal committees typically roll up four accounts: the general fund–state, the education legacy trust account, the Washington opportunity pathways account and the workforce education investment 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 for the NGFO overall.

For the NGFO, the final total of revenue for the completed 2019–21 biennium is $53,132 million; this is equal to the amount that had been forecasted in September, when the ERFC last met. The forecast for the 2021–23 biennium increased by $898 million to $60,238 million. The forecast for the 2023–25 biennium increased by $965 million to $64,047 million.

From 2017–19 to 2019–21, the actual NGFO growth rate is 15.3%. From 2019–21 to 2021–23, the forecasted NGFO growth rate is 13.4%. From 2021–23 to 2023–2025, the forecasted NGFO growth rate is 6.3%.

As always, the ERFC also adopted optimistic and pessimistic alternative revenue forecasts for the general fund–state (which produces 95% of total NGFO revenue). Under the optimistic scenario, revenue exceeds the baseline forecast by $2,804 million in 2021–23 and by $5,749 million during 2023–25. Under the pessimistic scenario, revenue falls short of the baseline forecast by $2,511 million during 2021–23 and by $5,294 million during 2023–25. The ERFC assigns a 20 percent probability to the optimistic scenario and a 30 percent probability to the pessimistic scenario.

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

Categories: Budget , Categories , Economy.