At its quarterly meeting today, the state Economic and Revenue Forecast Council (ERFC) updated its forecasts of state revenues. These new forecasts, which add nearly $2.8 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 forecast for the 2021–23 biennium increased by $1,453 million to $61,691 million. The forecast for the 2023–25 biennium increased by $1,320 million to $65,368 million. The forecast for the 2025–2027 biennium is $70,025 million. This is the first forecast for 2025–27 revenues.

From 2019–21 to 2021–23, the forecasted NGFO growth rate is 16.1%. From 2021–23 to 2023–2025, the forecasted NGFO growth rate is 6.0%. From 2023–2025 to 2025–27, the forecasted NGFO growth rate is 7.1%.

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 $2,534 million in 2021–23 and by $5,546 million during 2023–25. Under the pessimistic scenario, revenue falls short of the baseline forecast by $2,314 million during 2021–23 and by $5,222 million during 2023–25. The ERFC assigns a 20 percent probability to the optimistic scenario and a 30 percent probability to the pessimistic scenario.

As Emily noted yesterday, these revised forecasts will underpin the supplemental budget proposals of Senate and House budget writers.

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