At its quarterly meeting today, the state Economic and Revenue Forecast Council (ERFC) updated its forecast of state revenues. This is the first official forecast to incorporate the impact of the COVID-19 pandemic.

In recent years, budget reports from legislative fiscal committees have typically rolled up three accounts: the general fund–state, the education legacy trust account and the Washington opportunity pathways account. EFRC refers to this three-account roll-up as the near general fund state; budgeteers refer to the roll-up as “funds subject to the outlook” (NGFO). Under the four-year balanced budget requirement, positive ending balances are required for both the current and the following bienniums. Beginning July 1, the balanced budget requirement will extend to a fourth account, the workforce education investment account (WEIA).

For the NGFO as currently defined, the new forecast for the 2019–21 biennium is $47,800.4 million; this is $4,539.1 million less than had been estimated in February, when the ERFC last met. This total includes $125.2 gained from legislation enacted in the recent legislative session. The forecast for the 2021–23 biennium decreased by $4,342.85 million, to $51,347.0 million. Recent legislation added $213.5 million to revenue for this biennium. From 2019–21 to 2021–23, the forecasted NGFO growth rate is 7.4 percent.

For the WEIA, the new forecast for the 2019–21 biennium is $322 million, $29 million less than had been estimated in February; the new forecast for the 2021–23 biennium is $572 million, $56 million less than the previous forecast.

As always, the ERFC also adopted optimistic and pessimistic alternative forecasts for the NGFO. Under the optimistic scenario, revenue exceeds the baseline forecast by $2,087 million in 2019–21 and by $4,787 million during 2021–23. Under the pessimistic scenario, revenue falls short of the baseline forecast by $2,443 million during 2019–21 and by $5,393 million during 2021–23. The ERFC assigns a 25 percent probability to the optimistic scenario and a 25 percent probability to the pessimistic scenario.

The handout from the meeting is here; TVW video of the meeting is here.