February 12, 2021
The state budget situation looked dire last summer. Since then, both the revenue and spending sides of the balance sheet have improved. Revenues in 2019–21 are expected to be 10.7% higher than in 2017–19 (following several biennia of extraordinary revenue growth).
Enacted 2019–21 appropriations from funds subject to the outlook are 20.2% higher than 2017–19. But the cost of continuing current services in 2019–21 is expected to decrease (due to lower caseloads), and Gov. Inslee took several actions last year to reduce state spending. Additionally, the state has received billions of dollars in federal aid. Some of this can be used in place of state funding, and some is for new spending needs related to the pandemic.
As a result, there is not a budget shortfall for 2019–21. Further, the state is sitting on a rainy day fund with an estimated ending balance of $1.809 billion in 2019–21 and $2.345 billion in 2021–23.
Given the state’s current position, new taxes would be for new spending. The Legislature should be cautious about increasing the tax burden, particularly in a time of significant economic uncertainty.
Read the report here.Categories: Budget , Publications.