Today the Economic and Revenue Forecast Council adopted an official budget outlook based on Gov. Inslee’s 2022 supplemental operating budget proposal. Under the governor’s proposal, the unrestricted ending balance for funds subject to the outlook (NGFO) would be $1.316 billion in 2021–23 and $998 million in 2023–25.

The maintenance level (the cost of continuing current services, adjusted for enrollment and inflation) is expected to decrease by $1.144 billion in 2021–23, mostly due to enrollment declines in public schools. Interestingly, the maintenance level is expected to decrease by $1.244 billion in 2023–25, again mostly due to K–12 enrollment declines.

The governor’s new policy proposals would increase spending by $4.185 billion in 2021–23; the cost of these policies would be $4.657 billion in 2023–25. (The chart below shows how the appropriations in the governor’s budget compare to historical spending.)

The budget stabilization account (BSA, or the rainy day fund) balance would be $1.197 billion in 2021–23 and $1.823 billion in 2023–25. (The BSA balance was expected to be $1.820 billion in 2019–21, before the Legislature transferred the entire balance to the general fund–state last year. If the Legislature had left the $1.820 billion in the BSA, its balance would be about $3 billion in 2023–25.)

Under the four-year balanced budget requirement, the budget must balance in the second biennium with “the greater of” the official revenue forecast or assuming 4.5% annual growth in the second biennium. Last year, the Legislature chose to balance the budget over four years using the official revenue forecast, even though it grew by less than 4.5%. Sen. Rolfes said that they did this as “a way to not get trapped into overspending.”

Gov. Inslee’s proposal, and the official outlook, assume 4.5% revenue growth in the second biennium. This means that it has an extra $737 million to work with. But, if they had used the official revenue forecast instead, the budget would still balance over four years.

Previous posts on the governor’s proposals:

• Gov. Inslee proposes increasing NGFO appropriations for 2021–23 by 5.1% over the enacted biennial budget
• Policy changes in the governor’s proposed operating budget would increase appropriations by $4.185 billion
• Gov. Inslee’s 2022 supplemental transportation budget proposal would increase total budgeted transportation funds by 5.1% and shift federal and state funds into transportation accounts
• NGFO and federal relief appropriations in Gov. Inslee’s supplemental operating budget would be 16.1% above 2019–21; other federal relief would be appropriated in capital and transportation budgets
• Appropriations for the Department of Commerce and Department of Health have ballooned during the pandemic
• Gov. Inslee would use a portion of marijuana excise tax revenue for community reinvestment grants
• As tort liability has risen for Washington, the state liability account is in deficit
• Governor’s budget includes funding for future homeless shelter capacity grants (plus, how document recording surcharges fund various housing programs)
• Under Gov. Inslee’s budget proposal, state allocations for school nurses and other support staff would increase
• Enrollment stabilization or accelerated learning opportunities?