Office of Planning and Budgeting

Last month the Washington state Economic and Revenue Forecast Council (ERFC) released their June revenue forecast. Cumulative major General Fund-State (GF-S) revenue collections were $189 million higher than the February revenue forecast.

Here is a quick summary of the total projected GF-S revenue for each biennium:

  • $45.288 billion, for the 2017-19 biennium, 16.0% more than the 2015-17 biennium
  • $49.363 billion, for the 2019-21 biennium, 9.0% more than the 2017-19 biennium
  • $53.170 billion, for the 2021-23 biennium, 7.7% more than the 2019-21 biennium

Some context behind the numbers:

  • Cumulative real estate excise taxes (REET) were $25 million (8.0%) higher than forecasted.
  • Revenue Act taxes, which consist of sales, use, business and occupation (B&O), utility and non-cigarette tobacco products, make up the bulk of the GF-S revenue. Collections were $131 million (2.7%) higher than forecasted.

In July the ERFC released an economic & revenue update that showed a further increase in GF-S revenue collections. Here is how this update compares:

  • GF-S revenue collections for June 11 through July 10 were $41.1 million (2.4%) above the June forecast.
  • Revenue Act tax collections for the current period were $39.3 million (3.0%) higher than the June forecast.

Washington continues to lead the country in personal income growth. The U.S. Department of Commerce, Bureau of Economic Analysis (BEA) released state personal income estimates for the first quarter of 2018. These estimates showed Washington personal income rose to $434. 1 billion in the first quarter 2018 compared to $426.5 billion in the fourth quarter of 2017. With 7.4% growth rate, Washington was the highest among the states and the District of Columbia.

Check back with the OPBlog in September for future updates on revenue forecasts.

Date: April 5, 2018

OPB has posted two summaries, recapping the 2018 state legislative session, under the “Briefs” tab of the OPB website:

The 2018 Session Bill Summary lists the bills OPB tracked that were passed by the legislature. Links to veto messages are provided for bills that were partially vetoed by the Governor. Of the 775 bills that OPB tracked in the 2018 legislative session, 82 passed into law.

The 2018 Session Fiscal Note Summary lists the fiscal notes – evaluations of the fiscal impact of a bill proposal – that OPB completed on behalf of the UW (with the help of subject matter experts across the University) during the session. All fiscal notes are requested by legislative staff through the Office of Financial Management (OFM) in Olympia to guide legislative decision-making. This session, OPB responded to 145 fiscal note requests from OFM, breaking a record for the most in a legislative session.

 

Leadership in the state House and Senate released their compromise 2018 supplemental budget proposals earlier this week—the capital proposal came out on Tuesday evening and the operating proposal on Wednesday evening.  With the release of these budgets, and with their subsequent passage by the legislature, lawmakers ended the legislative session on time, for the first time since 2014.

The compromise budgets make changes to the recently approved 2017-19 biennial capital budget, as well as the 2017-19 biennial operating budget, which was approved last June. An OPB brief comparing the compromise budgets to prior proposals from the House, Senate, and Governor is now available here.

In the coming weeks, OPB will post summaries of approved legislative proposals that were tracked by the University, as well as fiscal notes (objective estimates of a bill proposal’s fiscal impact on the University) that were completed during the 2018 session. Those will be posted on the OPB briefs page.

On Monday, leadership in the Senate released their 2018 supplemental operating and capital budget proposals. On Tuesday and Wednesday, leadership in the House followed with the release of their 2018 supplemental operating and capital budget proposals. The supplemental proposals include technical corrections and minor appropriation changes to the recently approved 2017-19 biennial capital budget, as well as the 2017-19 biennial operating budget, which was approved last June. They also build off Governor Jay Inslee’s proposals, which he released in December.

Please see this OPB brief for a detailed comparison of the supplemental budget proposals released thus far.

As a reminder, now that the House and the Senate have offered competing proposals, lawmakers will work toward negotiating and passing compromise budgets by the scheduled end of session, on March 8, 2018. Stay tuned to the OPBlog for updates during the remainder of the 2018 legislative session.

 

 

Today, the Washington state Economic and Revenue Forecast Council (ERFC) released their February revenue forecast. The projected General Fund-State (GF-S) revenue forecast for the 2017-19 biennium increased by $647 million. Projected revenue collections for the 2019-21 biennium have also increased by $671 million. According to the Governor’s Office of Financial Management (OFM), this forecast is the “largest quarterly increase for the state since before the Great Recession.”

Here is a quick summary of the total projected GF-S revenue for each biennium:

  • $44.213 billion for the 2017-19 biennium, 15.4% more than that of the 2015-17 biennium.
  • $48.253 billion for the 2019-21 biennium, 9.1% more than expected 2017-19 biennial.
  • The initial forecast for the 2021-23 biennium is $51.932 billion, an increase of 7.6% over that of the 2019-21 biennium

Behind the numbers:

  • Cumulative major General Fund-State (GF-S) revenue collections from November 11, 2017 through February 10, 2018 were $185 million (3.5%) higher than forecasted in November.
  • The Washington economy saw strong housing construction and home price appreciation. Cumulative real estate excise taxes (REET) came in $44 million (21.1%) higher than forecasted. Projected property tax receipts are also 3% higher than expected.
  • For the first time in nearly three years, Washington exports increased (0.6%) in the fourth quarter of 2017.
  • The forecast anticipates continued but slowing growth in employment (2.2%) and personal income (4.6%). Disposable personal income is also higher than assumed (5.0%) than November because of federal tax cuts.

We expect that the majority leadership in the House and Senate will release budget proposals early next week. Stay tuned to the OPBlog for updates!

A proposed state capital budget, SB 6090, passed out of the Senate Committee on Ways & Means with substitutes and may be voted on soon.  Last session, lawmakers came to a compromise on a proposed capital budget, but it was ultimately not passed due to a disagreement over a rural water rights issue. This proposal is the same as that proposed compromise, except it includes language proposed by the Governor before this session that would allow the UW and other agencies to be reimbursed for capital expenditures that occurred on or after July 1, 2017 in the absence of an approved capital budget last year.  A similar process is occurring in the House with HB 1075.  OPB will monitor any changes that occur on the House or Senate floor on passage of the budget(s).

Stay tuned to the OPBlog for updates on the legislative session, including the capital budget.

Governor Jay Inslee released supplemental operating and capital budget proposals on Thursday. For more information, please see OPB’s brief. The Governor’s operating budget proposal includes technical corrections and minor appropriation changes to the current 2017-19 biennial budget (fiscal years 2018 and 2019). Because the legislature did not pass a capital budget in 2017, the Governor’s capital budget is a two-year budget covering the entire biennium.

Despite moderate growth predicted in the November Revenue Forecast, lawmakers in Olympia face significant challenges. Most notably, the Washington State Supreme Court recently ruled that the legislature has still not met its obligations to fully fund K-12 education required by their ruling in McCleary v. State of Washington. Governor Inslee’s proposal reflects this budgetary reality, proposing increases for K-12 education but only minor changes in overall funding for higher education institutions compared to the enacted 2017-19 biennial budget. New investments directed at the UW include additional funding for computer science enrollments.

On the capital side, the Governor’s proposal is similar to the proposed final capital budget that was negotiated, but ultimately not approved, in the 2017 session. That budget was not passed due to a disagreement over a fix to a different Washington Supreme Court decision regarding water rights (Whatcom County v. Hirst).

The Governor’s budget release marks the first step of the 2018 legislative session – set to begin on Monday, January 8, 2018. As a reminder, the House and the Senate will propose their own budgets throughout this short 60-day session as they work toward compromise supplemental budgets.

Stay tuned to the OPBlog for updates during the 2018 legislative session.

Today, the Washington state Economic and Revenue Forecast Council (ERFC) released November revenue forecast. The forecast increased projected General Fund-State (GF-S) revenue for the 2017-19 biennium by $304 million. Projected revenue collections for the 2019-21 biennium have also increased by $186 million. These new projections show a slight increase from the September revenue forecast.

Here is a quick summary of the total projected GF-S revenue for each biennium:

  • Final GF-S revenue collections for the 2015-17 biennium, which ended June 30, 2017, were $38.317 billion, an increase of 13.8 percent over the 2013-15 biennium ($6 million higher than what was estimated in September 2017).
  • $43.566 billion for the 2017-19 biennium, 13.7 percent more than the 2015-17 biennium.
  • $47.582 billion for the 2019-21 biennium, 9.2 percent more than the 2017-19 biennium.

Behind the numbers:

  • Cumulative major GF-S revenue collections from September 11, 2017 through November 10, 2017 were $119 million (3.9%) higher than forecasted in September.
  • Forecasted personal income in Washington is slightly higher than September.
  • The forecast attributes most changes in revenue to property taxes. Under legislation passed in the 2017 special sessions, property taxes for the next four years will increase by a new formula that will lead to more revenue collection.
  • Similar to the September forecast, concerns cited in this forecast include slow U.S. economic growth, weak labor productivity growth, and international trade concerns.

This is the last revenue forecast of the year. Governor Jay Inslee will use the November revenue forecast to craft his 2018 supplemental budget proposal (amending the 2017-19 biennial budget), which is expected to be released in December. Stay tuned to the OPBlog for updates on the Governor’s budget proposal when it is released.

Last month, the Economic and Revenue Forecast Council (ERFC) released their September revenue forecast, the first forecast of the current fiscal year. The forecast increased projected General Fund-State (GF-S) collections by $279 million for the current 2017-19 biennium and $243 million for the upcoming 2019-21 biennium. These increases are on top of increases projected in the June revenue forecast.

Here is a quick summary of the total projected GF-S revenue for each biennium:

  • $38.311 billion for the 2015-17 biennium, 13.8 percent more than the 2013-15 biennium
  • $43.262 billion for the 2017-19 biennium, 12.9 percent more than the 2015-17 biennium
  • $47.396 billion for the 2019-21 biennium, 9.6 percent more than the 2017-19 biennium

Behind the numbers:

  • The forecast is similar to the June forecast, but with slightly higher revenue projections. Most of the extra collections are projected to occur in the current biennium, which began on July 1, 2017.
  • The forecast attributes most changes in revenue to legislation that was passed in 2017 session, after the June forecast. The largest increases came from an increase to the state property tax levy for basic education and from an extension of retail sales and B&O tax liability to more categories of online sales. The legislature also repealed a sales tax exemption for bottled water. These legislative changes accounted for an additional $2.4 billion in the current biennium.
  • Similar to the June forecast, concerns cited in this forecast include slow U.S. economic growth, weak labor productivity growth, and international trade concerns.

As a reminder, there will be one more forecast in November, on which the Governor will base his proposed 2018 supplemental budget (amending the enacted 2017-19 biennial budget).

Stay tuned to the OPBlog for updates on revenue forecasts and the upcoming 2018 legislative session.

OPB has posted two summaries concerning the 2017 legislative session to the Briefs tab of our website:

The 2017 Bill Summary lists the bills OPB tracked during session that were passed by the legislature. Links to veto messages are provided for bills that were vetoed or partially vetoed by the Governor. OPB tracked over 460 bills in the 2017 legislative session, 69 of which passed into law.

The 2017 Fiscal Note Summary lists the fiscal notes—evaluations of the fiscal impact of a bill proposal—that OPB completed on behalf of the UW (with the help of subject matter experts across the University) during the 2017 session. All fiscal notes are requested by the Office of Financial Management (OFM) in Olympia to guide legislative decision-making. This session, OPB completed 111 fiscal notes.

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