State revenue projection for 2019–21 increased by $2.2 billion
But revenue collections and forecast remain below pre-pandemic levels
OLYMPIA – Washington’s projected Near General Fund revenue collections for the 2019–21 state budget have increased by more than $2.2 billion, according to estimates released today by the Washington State Economic and Revenue Forecast Council.
“Forecasting in the current environment remains challenging,” said Steve Lerch, forecast council executive director. “Although there has been an improvement in revenues above our anticipated level this quarter, they remain below pre-pandemic levels.”
Total Near General Fund revenues are now projected at nearly $50.4 billion for the current two-year state budget cycle, which began July 1, 2019. The increase in projected revenues would leave the state with a net $760 million surplus — including reserves — at the end of biennium.
The council also increased the Near General Fund forecast for the next biennium (2021–23) by more than $2.4 billion. The council projects Near General Fund revenues will total about $54.3 billion for the next biennium, which begins July 1, 2021.
In June, when the economic impacts of the COVID-19 pandemic were still largely unknown, the council lowered the state’s revenue projection by more than $9 billion over the next three years. With today’s forecast, the state’s revenue projections gained back more than half of that amount.
“Our revenue picture is vastly improved over what it was just a few months ago,” said OFM Director David Schumacher. “But we will still face challenges in meeting the needs of our most vulnerable citizens, funding education and addressing other requirements over the next three years.”
The state has already taken a number of steps to reduce spending in the current budget, such as cancelling scheduled pay raises for many of the state’s highest-paid employees, requiring regular furloughs for most state employees and imposing freezes on hiring, personal services contracts and equipment purchases.
Agencies were also directed to identify savings options in their 2021–23 budget requests. Agencies began submitting those requests to OFM last week.
The next quarterly revenue forecast is scheduled for Nov. 18, and Gov. Jay Inslee will submit his 2021–23 budget proposals to the Legislature the following month.