On Monday, the Senate Ways & Means Committee held a work session that included several items of fiscal interest. (The meeting can be watched here.)

First, Dr. Lerch of the Economic and Revenue Forecast Council gave an update on the economic outlook. That day it was announced that with the November collections report, revenues have come in $292.2 million above the September revenue forecast. The November revenue forecast will be adopted on Friday—as Kriss wrote yesterday, he expects an upward revision. In Dr. Lerch’s presentation, he talked about the impact of the state Supreme Court’s recent ruling on SHB 2167, the B&O surtax for certain financial institutions. The Court ruled that the tax is constitutional. According to Dr. Lerch, previous revenue forecasts had not included revenue from SHB 2167. Now, the November forecast will include the $425 million that the tax is estimated to raise over fiscal years 2022–2025.

Second, FY 2023 supplemental collective bargaining agreements (CBA) with state employees and non-state employee providers who bargain with the state were announced in October (see here and here). Ways & Means staff discussed the CBAs, which generally include a 3.25% wage increase. If the Legislature approves the CBAs and extends the wage increases to non-represented state employees, they are estimated to increase spending from funds subject to the outlook by $319.3 million in 2021–23 and by $450.5 million in 2023–25.

Third, the Office of Financial Management (OFM) had a presentation on federal relief funds, including the coronavirus state and local fiscal recovery funds (part of the American Rescue Plan Act), which states and local governments may use for purposes generally related to the pandemic, its economic impacts, or revenue loss (for example). The state has appropriated $3.155 billion of its share (it has $1.273 billion left). According to OFM, it has spent 30% of the amount appropriated so far.

The state also had a role in distributing about $440 million in coronavirus local fiscal recovery funds to local governments with fewer than 50,000 people (larger cities received their shares directly from the federal government). OFM has distributed the first half of these funds (the second half will come next year). However, the city of Brier “chose not to take those funds.” As I noted last month, Stateline has reported that some small towns nationally have refused the relief given the heavy administrative burden. Brier is a city of 6,815 in Snohomish County. Its share of the local fiscal recovery funds would have been about $1.9 million. Brier’s revenues in 2020 were $3.7 million.