January 30, 2020
Today the Economic and Revenue Forecast Council (ERFC) approved an outlook based on Gov. Inslee’s 2020 supplemental operating budget proposal. Under the proposal, the unrestricted ending balance for funds subject to the outlook would be $513 million in 2019–21 and $3 million in 2021–23.
Total reserves, including those in the constitutionally-protected rainy day fund, would be $2.371 billion in 2019–21 and $2.483 billion in 2021–23.
The funds subject to the outlook (and the four-year balanced budget requirement) are the general fund–state (GFS), the education legacy trust account (ELTA), and the opportunity pathways account (OPA). Last year, the Legislature enacted business and occupation tax surcharges to supplement higher education funding. We have argued that the workforce education investment account (WEIA), in which revenues from the new surcharges will be deposited, should also be subject to the four-year balanced budget requirement.
At the ERFC meeting today, staff was asked what the outlook would be if the WEIA were included. They provided a back-of-the-envelope estimate, accounting for the governor’s proposed maintenance and policy level WEIA changes, that including the WEIA in the outlook would cause the unrestricted ending balance to drop from $3 million to negative $265 million in 2021–23. (That figure assumes the current law surcharges remain in place; as I’ve written, the Legislature is working on making changes to them.)
Two bills have been introduced this session that would include the WEIA in the four-year balanced budget requirement. SB 6198 would require the GFS, ELTA, OPA, and WEIA to collectively balance over four years.
HB 2857 would require the GFS, ELTA, OPA, pension stabilization account, dedicated marijuana account, and basic health account to collectively balance over four years. The bill would also require the WEIA and the model toxics control operating account to separately balance over four years. There would be official revenue forecasts for each of these accounts.
Additionally, under current law, the budget need not balance over four years if money is appropriated from the rainy day fund. HB 2857 would change this so that the budget would have to balance if rainy day appropriations are made that are not related to an emergency or low employment growth.Categories: Budget , Categories.