Yesterday Gov. Jay Inslee released his proposed 2020 supplemental budget, which would make “mid-course corrections” to the budget for the 2019-21 biennium that was enacted last spring. The budget highlights document for the proposal is here. The web page for the proposal is here.

Budget reports from the Office of Financial Management often roll-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, a positive NGFO ending balance is required for both the current and the following bienniums.

Gov. Inslee’s proposal would increase NGFO appropriations to $53.333 billion, which is $834 million more that currently enacted appropriations. This $834 million increase is the sum of $478 million in maintenance level increases and $336 million in policy level increases. It is expected that reversions (unspent appropriations) would reduce actual NGFO spending for the 2019–21 biennium to $52.959 billion.

The governor also proposes to appropriate $319 million from the budget stabilization account (BSA). The BSA is the primary reserve fund for the NGFO. Appropriations from BSA are effectively appropriations from NGFO. Accounting for the appropriations from the BSA, the proposed increase in NGFO spending is effectively $1.153 billion.

In terms of total budgeted funds, current appropriations for the 2019–21 biennium sum to $99.706 billion. The governor’s proposal would raise total to $101.658 billion, an increase of $1.952 billion.

The governor’s proposal includes no significant revenue NGFO increases. Gov. Inslee’s proposed permanent ban on flavored vaping products is projected to reduce NGFO revenues by $4.7 million.

Under the enacted budget, the November 2019 Budget Outlook projects total reserves at the end of the 2019–21 biennium will be $2.977 billion ($802 million in the NGFO and $2.175 billion in the BSA). The governor’s proposed supplemental would reduce projected reserves at the end of the biennium to $2.364 billion ($505 million in the NGFO and $1.859 billion in the BSA).

According to the budget highlights document, Gov. Inslee’s supplemental proposal couples “modest adjustments” to the enacted budget with “strategic initiatives … to address the state’s homelessness crisis, add early learning opportunities and … to promote diversity, equity and inclusion in the workplace.” We will take a closer look at these adjustments and initiatives in an upcoming Policy Brief.