OLYMPIA – Washington’s projected Near General Fund revenue collections show a mixed picture, according to estimates released today by the Washington State Economic and Revenue Forecast Council. Revenue drops in the near term, exacerbating the expected deficit in fiscal year 2028, and then projections come in higher than the June forecast, from 2029 through 2031.

The increase in projections are made up of a $22 million increase in the forecast for the current 2025-27 biennium, a $430 million increase in the upcoming 2027-29 biennium, and a $2.38 billion increase in the subsequent 2029-31 biennium.

Biennium  Forecast revenue  Change from
June 2026 forecast 
2025–27 (current)  $76.26B $22M
2027–29  $82.59B $430M
2029–31  $94.12B $2.38B
Total  $2.83B

 

An increase in forecast revenue from the tax on income over $1 million accounts for most of the changes from Fiscal Year 2029 onwards, according to the Forecast Council. There are also projected reductions in revenue from business and occupation tax and retail sales tax, along with increases in revenue from use tax and public utility tax.

Quotes

“The revised U.S. and Washington economic forecasts are slightly more optimistic for the forecast period, and this led to modest changes in the near-term for most Near General Fund revenues,” noted Dave Reich, forecast council executive director. “On the transportation side, revenues are reduced in the ensuing biennium compared to what we had in June due largely to policy/program changes.”

“While any improvement to the forecast is positive news, this doesn’t change how challenging the budget situation is, especially in the near future when revenues will decrease,” said Office of Financial Management Director K.D. Chapman-See. “Creating a sustainable budget is the work we have ahead of us. The cost to maintain current levels of essential services continues to increase, as does the demand on state resources. This forecast gives us valuable information, but there’s more to learn over the coming months as we work to develop the governor’s budget proposal, including from the caseload and revenue forecasts in November.”

Why the revenue forecast matters

The forecasts for Near General Fund revenue collections determine the resources for state services. State law requires a budget that is balanced over four years, and the Near General Fund accounts for most of that state operating budget.

A guide to the Washington state budget process can be found on the OFM website.

Transportation revenues also projected

The Transportation Economic and Revenue Forecast Council also released an updated forecast of transportation revenues today. The current 2025-27 biennium total state transportation revenue is now forecast to be $8.7 billion, which is a $1 million (0.01%) decrease from the June 2026 forecast. For the 2027-29 biennium, revenues are projected at $10.49 billion, which is $126 million (1.2%) below the June 2026 forecast. For the 2029-31 biennium, revenues are projected at $9.97 billion, which is $39 million (0.4%) below the June 2026 forecast.

According to the Forecast Council, the downward revisions reflect a mix of offsetting changes among revenue sources. Revenue from fuel tax, licenses, permits and fees increased, but those gains were offset by reductions in business and vehicle sales tax revenues, resulting in a net reduction in overall transportation revenues.

Transportation revenues through 2031 are now projected to be $599 million lower than the February 2026 forecast that was used when the Legislature passed a supplemental budget in March.

Transportation revenue forecast materials are available on the ERFC website.

What’s next

The next forecasts for Near General Fund revenue and transportation revenues are scheduled for November 16, 2026. Revenue review meetings are broadcast on TVW, with scheduling details available beforehand on the ERFC website.

About the Economic and Revenue Forecast Council: The Economic and Revenue Forecast Council supports statewide goals by accurately forecasting economic activity and state tax revenue for Washington state. The ERFC is comprised of both legislative and executive members and the State Treasurer. Four times a year the organization adopts a bipartisan revenue forecast that is then used to build the state operating and transportation budgets. The ERFC is also charged with providing the state budget outlook to increase transparency and to promote state government financial stability.

About the Office of Financial Management: The Office of Financial Management provides vital information, fiscal services and policy support that the governor, Legislature and state agencies need to serve the people of Washington.

Press contact

Contact: Hayden Mackley, hayden.mackley@ofm.wa.gov, 360-628-2780