At its quarterly meeting today, the state Economic and Revenue Forecast Council (ERFC) updated its forecast of state revenues. This new forecast adds nearly $3.3 billion to the amount available over the remainder of the current biennium and the next biennium.

In recent years, budget reports from legislative fiscal committees have typically rolled up three accounts: the general fund–state, the education legacy trust account and the Washington opportunity pathways 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. Since July 1, the balanced budget requirement includes a fourth account, the workforce education investment account (WEIA).

For the NGFO as now defined, the new forecast for the 2019–21 biennium is $52,334.2 million; this is $1,339.5 million more than had been estimated in September, when the ERFC last met. The forecast for the 2021–23 biennium increased by $1,948.8 million to $56,614.9 million.

From 2017–19 to 2019–21, the forecasted NGFO growth rate is now 13.6%. From 2019–21 to 2021–23, the forecasted NGFO growth rate is 8.2%.

As always, the ERFC also adopted optimistic and pessimistic alternative forecasts for the general fund–state. Under the optimistic scenario, revenue exceeds the baseline forecast by $629 million in 2019–21 and by $3,795 million during 2021–23. Under the pessimistic scenario, revenue falls short of the baseline forecast by $641 million during 2019–21 and by $3,852 million during 2021–23. The ERFC assigns a 25 percent probability to the optimistic scenario and a 25 percent probability to the pessimistic scenario.

Last June, in the first revision following the onset of the pandemic, ERFC reduced its forecasts for 2019–21 and 2021–23 by a combined $8.9 billion. The subsequent September and November revisions added significant amounts back. With the March revision, the forecast is now back to the pre-pandemic level.

In an upcoming post, Emily will provide her analysis of the new forecast’s effect on the outlook for the budget.

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