November 18, 2022
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 $1.4 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 $762 million to $63,952 million. The forecast for the 2023–25 biennium increased by $681 million to $66,185 million. The forecast for the 2025–2027 biennium increased by $747 million to $70,833 million.
From 2019–21 to 2021–23, the forecasted NGFO growth rate is 20.4%. From 2021–23 to 2023–2025, the forecasted NGFO growth rate is 3.5%. 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 $1,165 million in 2021–23 and by $4,328 million during 2023–25. Under the pessimistic scenario, revenue falls short of the baseline forecast by $1,360 million during 2021–23 and by $5,311 million during 2023–25. The ERFC assigns a 15 percent probability to the optimistic scenario and a 35 percent probability to the pessimistic scenario.
The governor will use this forecast to prepare the budget proposal he presents to the legislature in January. ERFC will issue an updated revenue forecast in March, and legislators will use that updated forecast to write the budget that they eventually enact.
A lot can change between November and March.Budget , Economy.