March Revenue Forecast Shows Positive Growth
Earlier today, the Economic and Revenue Forecast Council (ERFC) released its March revenue forecast, which increased projected General Fund-State (GF-S) collections by $247 million for the current 2015-17 biennium and by $303 million for the upcoming 2017-19 biennium. These increases are on top of the increases projected in the November revenue forecast.
Here is a quick summary of the total projected GF-S revenue for each biennium:
- $38.227 billion for the 2015-17 biennium, 13.5 percent more than the 2013-15 biennium
- $40.817 billion for the 2017-19 biennium, 6.8 percent more than the 2015-17 biennium
- $43.842 billion for the 2019-21 biennium, 7.4 percent more than the 2017-19 biennium
Behind the numbers:
- The forecast largely attributes the higher projections to increases in retail sales tax and Real Estate Excise Tax (REET) collections.
- The forecast includes slightly stronger personal income and employment growth than were projected in November
- Concerns cited in the forecast include slow global and U.S. Economic Growth, weak labor productivity growth and uncertainty regarding fiscal and trade policy.
Any excess revenue collected in the 2015-17 biennium will contribute to reserves that will be available as one-time funds to spend in the 2017-19 biennium. Budget writers in the Senate and House will use this updated forecast of fund balance and projected 2017-19 revenues as a baseline for their budget proposals, which are expected to be released within the next couple weeks. During today’s meeting of the Economic & Revenue Forecast Council, Senator Braun and Representative Ormbsy (chairs of the Senate Ways & Means Committee and House Appropriations Committee, respectively) discussed that overall, this revenue forecast is positive news and will be used to make final adjustments to each of their budget proposals.
The state continues to face significant budgetary challenges, largely due to required investments in K-12 education. Governor Inslee’s operating budget proposal, released in December, included over $4.4 billion in new revenue to help invest in K-12 education. Stay tuned to the OPBlog for updates on budget proposals as they are released by leadership in the House and Senate.