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 $2.2 billion to the amount available over the remainder of the current biennium and the next biennium.

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 as a whole.

For the NGFO, the new forecast for the soon to end 2019–21 biennium is $53,171.9 million; this is $837.7 million more than had been estimated in March, when the ERFC last met. This total includes a $2.3 million reduction due to legislation enacted during the recent session. The forecast for the 2021–23 biennium increased by $1,798.2 million to $58,413.1 million; $399.0 million of this gain is due to legislation. The forecast for the 2023–25 biennium increased by $2,245 million to $62,152 million; $1,022 million of this gain is due to the new capital gains tax.

From 2017–19 to 2019–21, the forecasted NGFO growth rate is now 15.4%. From 2019–21 to 2021–23, the forecasted NGFO growth rate is 9.9%. From 2021–23 to 2023–2025, the forecasted NGFO growth rate is 6.4%.

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 $104 million in 2019–21 and by $3,444 million during 2021–23. Under the pessimistic scenario, revenue falls short of the baseline forecast by $81 million during 2019–21 and by $3,391 million during 2021–23. The ERFC assigns a 25 percent probability to the optimistic scenario and a 25 percent probability to the pessimistic scenario.

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