Last week, the Caseload Forecast Council (CFC) adopted the November caseload forecast. The caseload forecast helps to determine the maintenance level (the cost of continuing current services, adjusted for enrollment and inflation) for the state operating budget. This particular forecast will be used in the governor’s 2024 supplemental budget proposal. (The Legislature will base its proposals on the February 2024 caseload forecast.)

Additionally, during the CFC meeting, the Office of Financial Management (OFM) presented its November 2023 population forecast. (The caseload forecast only covers the current biennium, but the population forecast goes out to 2050.)

The February 2023 caseload forecast (on which the current budget is based) expected K–12 enrollment to increase in SY 2023–24 and decrease in SY 2024–25. Now, K–12 enrollment is expected to decline in both years, by 0.4% and 0.1%, respectively. Compared to February, the current forecast is down 0.7% for SY 2023–24 and 0.6% for SY 2024–25.

According to the November forecast, “For both 2023-24 and 2024-25, enrollment growth will be flat due to declining birth rates and smaller age cohorts progressing through the K-12 system. For example, kindergarten declined year-over-year by 4.6 percent while Running Start grew year-over-year by 13.2 percent.”

The CFC also provides an unofficial, long-range projection for public school enrollment. Enrollment is expected to continue to fall in each year through at least SY 2028–29. From SY 2019–20 (the pre-pandemic high point) to SY 2028–29, public school enrollment is expected to drop by 54,964 students (5%).

Meanwhile, beginning with the 2020 population forecast, OFM has estimated that Washington’s population aged 5–17 will decrease from the mid-2020s to the mid-2030s. (Prior to 2020, the population forecasts had assumed this age group would grow in every year.) Last year’s population forecast estimated that the group’s population would decrease in each year from 2026 through 2031, by a total of 17,411.

For the 2023 population forecast, OFM updated its fertility and mortality assumptions. The natural change in the total state population (births minus deaths) from 2021 to 2050 is now expected to be 101,253 lower than in the Nov. 2022 forecast. Most of that difference is due to lower expected births. (The population is still expected to increase each year due to natural change and especially net migration, but the growth will be slower than expected last year.) The number of people aged 5–17 under the current forecast is estimated to decrease in each year from 2025 through 2033, by a total of 31,306.

Note, too, that the current forecast expects the population aged 70 and over to exceed the number aged 5–17 beginning in 2031.

Other notes from the caseload forecast:

• Special education enrollment is expected to grow through SY 2024–25, regaining its pre-pandemic peak. According to the forecast, the growth is due to the passage of HB 1436 earlier this year. The bill increased the cap on state funding for special education from 13% to 15% of enrollment. (Note that the office of superintendent of public instruction has requested funding in the 2024 supplemental to eliminate the cap entirely.) Compared to the February 2023 forecast, special education enrollment is now estimated to be 6.4% higher in SY 2023–24 and 7.7% higher in SY 2024–25.
• Washington College Grant (WCG) enrollment is expected to decrease in SY 2023–24 and then increase slightly in SY 2024–25. Compared to the February forecast, WCG enrollment is now estimated to be 8.4% higher in SY 2023–24 and 11.5% higher in SY 2024–25. The forecast notes, “For the 2023–24 year, FAFSA filings by younger and older students from low-income families indicate interest in higher education is starting to rebound.”
• Working Connections Child Care (WCCC) caseloads are estimated to increase 17.9% in 2023, 15.3% in 2024, and 7.5% in 2025. These large increases are due to two bills enacted earlier this year (2SHB 1447 and 2SSB 5225) that remove eligibility limits for Temporary Assistance for Needy Families (recipients of which are eligible for WCCC) and expand WCCC eligibility. The forecast for 2024 and 2025 are 5.8% and 6.4%, respectively, higher than forecasted in February.
• During the pandemic, the federal government provided an enhanced match for Medicaid and put a continuous enrollment requirement in place. The enhanced match will end next month, and states were allowed to reevaluate Medicaid eligibility beginning in April. Washington began the reevaluations at that time, but, according to the forecast, the “redetermination process has been slower than assumed in prior forecast cycles.” Thus, the current forecast for Medicaid for adult caretakers and children is 7.5% higher than in February for both 2024 and 2025. That said, the current forecast still assumes that the 2024 caseload will drop by 7.7% over 2023. The forecast for Medicaid for low-income adults is also up compared to February, but it is still expected to drop by 22% from 2023 to 2024 and by 13.9% from 2024 to 2025.

An unofficial and very preliminary estimate from OFM suggests that the new caseload forecast and other adjustments could increase 2023–25 general fund–state spending by about $1 billion (compared to the February 2023 forecast). That estimate will be refined throughout the budget process, but it does signal that the cost of continuing current services is increasing (unlike in the 2022 supplemental).