Office of Planning and Budgeting

This week, leadership in the House and Senate released their respective supplemental operating and capital budget proposals for the current biennium (FY16 & FY17), which follow the December release of Governor Jay Inslee’s proposals. As a reminder, the House and Senate proposals will be amended before they pass their respective chambers.

Please see the OPB brief for a detailed comparison of the House, Senate and Governor’s supplemental operating and capital budget proposals.

Some highlights:

  • The budget released by the leadership in the Senate Ways & Means Committee would provide the most funding overall, largely because it includes additional funding for the resident undergraduate tuition reduction backfill associated with 2ESB 5954.
  • None of the three capital budgets provide additional funding for the UW beyond the original 2015-17 capital budget.

Legislators will have until March 10, the last day of session, to complete and pass a compromise budget.

See the table below for a quick comparison of the budget proposals:

BudgetComparison

 

 

Earlier today, the leadership in the House Appropriations Committee released their 2016 supplemental operating budget proposal. Toward the end of this week, the leadership in the Senate Ways & Means Committee will release their budget. Following that release, we will post a brief here outlining the differences between Governor Inslee’s proposed budget and the House and Senate proposals.

As a reminder, supplemental budgets include technical corrections and minor appropriation changes to the current 2015-17 biennial budget (fiscal years 2016 and 2017). Budget proposals in the House and the Senate will be amended in their respective committees, and possibly on each chamber floor, before negotiations begin towards a compromise budget.

Overview of the House budget:

Compared to the Governor’s proposal, the UW would receive an additional $50,000 to fully fund the implementation of HB 1138. In addition, the House budget would not reduce the UW’s allocation for legal services (the Governor proposed a reduction of $151,000).

Under the House proposal, the UW’s share of the settlement in the Moore v. HCA lawsuit would increase to nearly $16.3 million, compared to $15.6 million in the Governor’s budget.

The House Capital Budget Committee will release its 2016 supplemental capital budget proposal on Wednesday. Stay tuned to the OPBlog for updates on proposed budgets as they move through the process.

On Wednesday, the Economic and Revenue Forecast Council (ERFC) released its February revenue forecast, which reduced projected General Fund-State (GF-S) collections compared to the November revenue forecast (see our blog post here). The GF-S revenue forecast decreased by $67 million for the current 2015-17 biennium and by $442 million for the 2017-19 biennium. While the revision to the 2017-19 outlook is not inconsequential, there will be at least four more revenue forecasts between now and when the legislature will set a 2017-19 biennial budget – plenty of time for the outlook to change.

  • Total projected GF-S revenue for the 2015-17 biennium is now $37.137 billion, 10.3 percent more than the 2013-15 biennium.
  • Total projected GF-S revenue for the 2017-19 biennium is now $40.125 billion, 8 percent more than the 2015-17 biennium.
  • The forecast included an initial forecast of GF-S revenue for the 2019-21 biennium of $43.441 billion, 8.3 percent more than the 2017-19 biennium.

Behind the numbers:

  • The forecast attributes decreases in projected revenues to slower than expected growth in the U.S. and Washington state economies.
  • Washington exports declined for the first time since 2009.
  • Other negative factors cited in the forecast include lower forecasted personal income growth, reductions in housing permits and property tax growth, and lower tax receipts due to low oil and gas prices.
  • Some positives include slightly higher than expected tax receipts since the November forecast, increases in hourly wages, and the fact that lower oil and gasoline prices are a positive for consumers.

The Governor’s Council of Economic Advisors, which advises the Governor on the state of financial matters, offered a slightly more pessimistic revenue prediction based on the ERFC February Forecast, predicting additional decreases in forecasted GF-S revenue of $55 million in 2015-17 and $202 million in 2017-19.

Budget writers in the House of Representatives and the Senate will use the February Revenue Forecast to set expenditure levels for their 2016 supplemental budget proposals. House and Senate budget proposals are expected to be released the week of February 22. The last day of the regular session is March 10.

Stay tuned to the OPBlog for updates on budget proposals from the House and Senate when those are released.