At its quarterly this morning this morning, the state Economic and Revenue Forecast Council (ERFC) updated its forecasts of state revenues. These new forecasts increase the amount available over the current and next bienniums by a total of $752 million. 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 this 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 estimate of revenue for the recently completed 2021–23 biennium decreased by $17.9 million to $64,733.8 million. The NGFO forecast for the 2023–25 biennium increased by $191.4 million to $66,883.3 million. (Most of this increase is expected to occur in the second year of the biennium.) The forecast for the 2025–2027 biennium increased by $578.9 million to $71,505.8 million.

From 2019–21 to 2021–23, the forecasted NGFO growth rate is 21.8%. From 2021–23 to 2023–2025, the forecasted NGFO growth rate is 3.3%. From 2023–2025 to 2025–27, the forecasted NGFO growth rate is 6.9%.

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 $2,986 million during 2023–25. Under the pessimistic scenario, revenue falls short of the baseline forecast by $3,645 million during 2023–25. The ERFC assigns a 15 percent probability to the optimistic scenario and a 30 percent probability to the pessimistic scenario.

Governor Inslee will base his proposed 2023–25 budget on the revenue forecast that the ERFC issued today. The Legislature the budget it ultimately adopts on an updated forecast that the ERFC will issue on March 20.

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