Planning & Budgeting

February 17, 2022

February Revenue Forecast Reflects Sustained Growth as Legislature Finalizes their Supplemental Budget Proposals

The Economic and Revenue Forecast Council (ERFC) released its February revenue forecast on February 16, 2022. We noted in our previous blog post that the November revenue forecast showed continued economic growth, despite rising COVID-19 cases, supply chain disruptions, and rising inflation. In Washington state, the COVID-19 case rates are now steadily declining from the recent surge in December resulting from the emergence of the Omicron variant. While rising inflation and oil prices, the threat of new and emerging COVID-19 variants, and geopolitical instability pose ever-present risks to revenue forecasting, total state revenues are expected to grow 16.1 percent between the 2019-21 and 2021-23 biennia, and 6.0 percent between the 2021-23 and 2023-25 biennia.

GDP and employment numbers remain relatively unchanged since the November forecast; however, Washington has seen a positive variance of $452 million in collections, due to stronger than anticipated personal income growth, stronger residential construction and construction employment, and stronger-than-expected growth in retail sales and real estate transactions. These factors combined with the continued rise in inflation, have all contributed to an increase of $1.45 billion for the current biennium (2021-23), and $1.32 billion for the next biennium (2023-2025).

More background on state revenue forecasts is available here.

Near General Fund-State

Here is a quick summary of the total preliminary and projected Near General Fund-State (GF-S) revenue for each biennium:

  • $61.7 billion for the 2021-23 biennium, 16.1 percent over the 2019-21 biennium.
  • $65.4 billion for the 2023-25 biennium, 6.0 percent over the expected 2021-23 biennium.
  • $70.0 billion for the 2025-27 biennium, 7.1 percent over the expected 2023-25 biennium.

Some context behind the numbers for Near GF-S accounts from which the University receives funding:

  • Forecasted revenue dedicated to the Workforce Education Investment Account (WEIA) has been increased by $6 million in the 2021-23 biennium and $5 million in the 2023-25 biennium. Forecasted WEIA revenue is now $684 million for the 2021-23 biennium, $753 million for the 2023-25 biennium, and $831 million for the 2025-27 biennium.
  • The forecast of Education Legacy Trust Account (ELTA) revenue was increased by $56 million in the 2021-23 biennium and $2 million in the 2023-25 biennium. Forecasted ELTA revenue is now $1.7 billion for the 2021-23 biennium, $2.1 billion for the 2023-25 biennium, and $2.3 billion for the 2025-27 biennium.

This latest revenue forecast will be considered by the Washington state legislature as they prepare to finalize their 2022 supplemental budget proposals in the coming days. These proposals make adjustments to the enacted 2021-23 biennial budget. They follow previous proposals from Governor Inslee, who proposed significant investments in affordable housing, climate and clean energy, protection and restoration of salmon habitats, increases to K-12 learning support, as well as some initiatives that impact the University.

The next state revenue forecast will be released in June. Stay tuned to the OPBlog for updates on the 2022 supplemental budget proposals and the legislative session!