On Wednesday, the Washington state聽Economic and Revenue Forecast Council聽released its聽November revenue forecast, which projected a slight increase to General Fund-State (GF-S) collections over the聽September revenue forecast. The GF-S revenue forecast increased by $215 million for the current 2015-17 biennium and $137 million for the 2017-19 biennium.
- Final GF-S revenue collections for the 2013-15 biennium were $33.666 billion.
- Total projected GF-S revenue for the 2015-17 biennium is now $37.980 billion, 12.8 percent more than the 2013-15 biennium.
- Total projected GF-S revenue for the 2017-19 biennium is now $40.514 billion, 6.7 percent more than the 2015-17 biennium.
- Total projected GF-S revenue for the 2019-21 biennium is now $43.656 billion, 7.8 percent more than the 2017-19 biennium.
Behind the numbers:
- The forecast attributes the higher projections due mainly to increases in retail sales tax and Real Estate Excise Tax (REET) collections.
- The forecast includes slightly stronger personal income and employment but lower housing permits.
- Concerns cited in the forecast include slow global and U.S. Economic Growth, weak labor productivity growth and uncertainty regarding fiscal and trade policy.
- Washington state employment is up by 13,500 net new jobs in September and October.
According to an , this additional tax revenue will contribute to a 2017-19 state budget that is expected to be more than $40 billion. David Schumacher, Director of the Governor鈥檚 Office of Financial Management, stated that this increase in revenue 鈥渁lways helps, but it doesn鈥檛 solve the huge problems we鈥檙e facing.鈥� One of the biggest problems Schumacher referred to is the Washington state Supreme Court鈥檚 mandate to increase K-12 education spending (McCleary v. State of Washington). While there is current debate about the estimated cost of complying with McCleary, the most commonly cited estimate is approximately $3.5 billion, and in Schumacher鈥檚 opinion 鈥渢here鈥檚 broad agreement that we鈥檙e that neighborhood.鈥�
Governor Jay Inslee will use this revenue forecast and estimates for complying with McCleary when crafting his state budget proposal, which will be released in mid-December in advance of the 2017 legislative session. Stay tuned to the OPBlog for updates on the Governor鈥檚 budget proposal when it is released.