Kriss wrote a few days ago that the Economic and Revenue Forecast Council (ERFC) increased the state revenue forecast last week. In near general fund–state plus opportunity pathways (NGFS+) terms, 2015–17 revenue is expected to increase by $308.2 million and 2017–19 revenue is expected to increase by $126.4 million. As Opportunity Washington writes, “While the gain is welcome, it’s also not a game-changer.”

The budget outlook adopted by the ERFC last month (and based on the February revenue forecast) showed an unrestricted ending fund balance of $474 million in 2015–17 and negative $314 million in 2017–19. At that time, total reserves (including the rainy day fund) were expected to be $1.174 billion in 2015–17 and $829 million in 2017–19. The new revenue forecast means that the unrestricted ending fund balance in 2017–19 is now expected to be in the black. But how far will it go?

The Office of Financial Management (OFM) said last week,

With the latest forecast, the state is now projected to have nearly $1.5 billion in total reserves at the end of the current biennium and more than $1.4 billion at the end of the 2017–19 biennium. Those reserve figures, however, do not take into account the multibillion obligation the state faces in the next biennium to meet its constitutional obligation to fully fund basic education.

While the exact number needed to address the state’s basic education funding obligations under the McCleary decision is unknown at this time, the state is acutely aware of those obligations. As David Schumacher of OFM wrote to state agencies earlier this month about the 2017–19 budget process,

. . . the state must further increase state funding of K-12 school employee compensation at a cost of several billion dollars next biennium (McCleary v. State of Washington). Meeting the state’s constitutional duty to fully fund K-12 education is an enormous challenge and the top budget priority. In addition, the state continues to face cost pressures to address state workforce and vendor compensation needs and other policy issues.

(Emphasis added.)

In the end, the revenue increase will not likely go very far. (After all, it's a $300 million increase to a $38 billion budget.) Jerry Cornfield of the Everett Herald reports,

“It’s coming in 10s and 20s which is always good but it’s not solving all the problems,” said David Schumacher, director of the Office of Financial Management. “Our ability to do anything new other than McCleary is very unlikely. We aren’t going to have any money to buy new stuff. This is the new reality.”

For more on the possible McCleary funding needs in 2017–19, see our recent special report.