The latest revenue forecast for Washington state has exceeded prior expectations, though one North Clark County senator and Republican budget leader has warned of an upcoming financial “iceberg.”
On Nov. 18, the state Economic and Revenue Forecast Council (ERFC) released a forecast which showed $1.4 billion is expected to be collected by the state over Washington’s four-year budget outlook. The forecast showed an additional $762 million for the 2021-2023 budget cycle, and $681 million for the following two years.
State revenues are expected to be just shy of $64 billion in the current 2021-2023 biennium, according to the forecast. That is more than 20% higher than the 2019-2021 biennium. The 2023-2025 biennium is currently forecasted to be about $66.2 billion, 3.5% more than the current cycle.
Following the release of the forecast, state Sen. Lynda Wilson, R-Vancouver, said she expected next year to be a “reality check” for state finances.
“While inflation was hitting a 40-year high this year, our Democratic colleagues were increasing state spending at a rate not seen in 30 years,” Wilson, a member of the ERFC, said in a statement.
She said maintaining the programs and services included in the spending alongside the end of federal COVID-19 pandemic funding will prove challenging for the state.
Wilson said an economic slowdown indicated by an earlier forecast in September led some to suggest a looming budget deficit. Economic Revenue Forecast Council Executive Director Stephen Lerch acknowledged November’s report painted a rosier picture than initially expected, according to reporting by The Center Square.
“We really had that revenue growth slowing a bit too soon,” Lerch said at the Nov. 18 meeting of the ERFC. “We still do believe that things will slow down, but clearly we had that a little bit sooner than was appropriate.”
Though the latest numbers show “a bit of a rebound,” Wilson said news of layoffs and continued high costs indicate it isn’t time for celebration.
“Our state could be just one negative forecast away from a collision course with a financial iceberg, and a shortfall would mean painful spending cuts, painful tax increases or both,” Wilson said.
She said tax increases set to go into effect in 2023 would exacerbate the existing issues of affordability in Washington. She added Republicans in the Washington State Legislature have pushed for tax relief, “yet Democrats rejected every one of our proposals to let Washingtonians keep more of their own money.”
Wilson said there are hints from Gov. Jay Inslee’s office of “broad-based” tax relief next year, but she isn’t convinced that will materialize. She said the more positive forecast could make it hard for lawmakers to deny spending increases by state agencies who she said have grown accustomed to the spending in the last several years.
“With the 2023 session around the corner, and the governor’s budget proposal being presented to the Legislature next month, we’ll see soon enough whether the Democrats are on the side of families who need help affording the basics — or a government that has been well fed for many years,” Wilson said.
No comments on this item Please log in to comment by clicking here