I have put together rough “outlooks” for the 2013–15 biennium based on the supplemental budgets passed by the House and the Senate. These projections follow closely that prepared by the Office of Financial Management of Gov. Gregoire’s November supplemental proposal, with adjustments for the specifics of the House and Senate budgets. The one deviation I have made from OFM’s assumptions is in regard to the medical assistance program. I assume that per capita medical assistance costs will grow by 5 percent per year rather than the average 2 percent assumed by OFM.

With the House 2012 supplemental, the state is projected to face a shortfall of more than $2.5 billion in the three NGFS+ accounts (the general fund–state account, the education legacy trust account and the Washington opportunity pathways account). This shortfall would be offset somewhat by $551 million in the budget stabilization account. Under the Senate supplemental, the NGFS+ shortfall is only $127 million and total reserves are positive—$424 million.

The better outlook under the Senate budget is largely due to three factors: (1) The gimmick used by the House budget to delay certain payments to school districts for school year 2012-13 from state FY 2013 to state FY 2014 throws a “bow wave” of about $400 million into the 2013-15 biennium. (2) The programmatic cuts that the Senate makes in place of this gimmick provide ongoing savings of around $800 million in 2013–15. (3) Repealing the currently suspended Initiatives 728 and 732, as the Senate budget proposes, eliminates bow waves of nearly $1.2 billion in 2013–15.