Looking back at state budgeting in the Great Recession, part 1: Revenue losses

By: Emily Makings
9:38 am
April 7, 2020

As the economic outlook has worsened, the state has cut back its expectations for new spending in 2019–21. First, the Legislature passed a 2020 supplemental operating budget last month that appropriated less than either of the earlier House or Senate proposals. Second, Gov. Inslee vetoed $186.5 million of new spending passed by the Legislature.

Even with these actions, the 2020 supplemental still increases 2019–21 appropriations from funds subject to the outlook plus the workforce education investment account (NGFO+WEIA) by $789.3 million.

We don’t yet know how much state revenues will decrease in the June forecast. According to the Seattle Times, David Schumacher of the Office of Financial Management said, “But, at this point, we expect projected revenues for the next few years to fall by billions of dollars . . . The decline will likely be at least as bad as, if not worse than, what we saw during the Great Recession.”

In a series of blog posts over the next few weeks, we’ll take a look back at how the state responded to revenue losses in the Great Recession. To begin, how much did revenues decline?

The Economic and Revenue Forecast Council began reducing the general fund–state (GFS) forecast in November 2007. There was a slow drip of forecast revenue reductions until February 2012.

From September 2007 through November 2009, 2007–09 GFS revenues declined by $2.283 billion (7.1 percent). Over the course of the 2009–11 biennium, revenues declined by $5.940 billion (17.4 percent). Through November 2011, revenues for 2011–13 declined by $2.036 billion (6.3 percent). All in all, from the September 2007 forecast through the November 2011 forecast, revenues over the three biennia declined by $10.259 billion.

The charts show the progression of losses by biennium. (The revenue increases in the June 2010 forecast for 2009–11 and 2011–13 were the result of tax increases adopted by the Legislature that year.)

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