The Legislature has passed a supplemental operating budget that would increase 2023–25 appropriations from funds subject to the outlook (NGFO) by $2.143 billion (3.1%). Including the supplemental, revised 2023–25 appropriations are 15.8% higher than actual 2021–23 spending. (The long-term average biennial growth is 9.8%.)

Since the biennial budget was adopted last year, the NGFO revenue forecast increased by $3.150 billion through 2025–27. The supplemental budget does not increase taxes, but it does use $798 million from the Washington rescue plan transition account (WRPTA, the shadow reserve account) for general spending. Total reserves at the end of 2023–25 would be 11.8% of revenues and other resources and total reserves at the end of the outlook period would be 7.1% of revenues and other resources. (The state treasurer recommends reserves be 10% of revenues.)

The high level of NGFO spending in the supplemental budget is counterbalanced by fairly healthy reserve levels. Although the Legislature should not be using reserves for general spending at a time when revenues are growing, it is a consolation to be finished with the WRPTA. Reserves should be held in the constitutionally protected budget stabilization account.

Read the report here.