Planning & Budgeting

July 3, 2024

June Revenue Forecast Revised Downward for Current and 2025-27 Biennia

The Washington State Economic and Revenue Forecast Council (ERFC) released its June revenue forecast on Wednesday, June 26, 2024. Revenue projections were revised downward for the current 2023-25 biennium as well as for the 2025-27 biennium.  

In February, we highlighted that experts expected revenue to increase over previous projections for the 2023-25 and 2025-27 biennia. This growth was driven by the continued strength of the job market, both nationally and at the state level. 

The June 2024 forecast notes that the Seattle-area consumer price inflation continued to exceed the national average, with the seasonally adjusted CPI rising 4.4% compared to the 3.4% increase in the U.S. City Average index. While inflation continues to slow, it is now expected that the Federal Reserve will start reducing interest rates in the fourth quarter of 2024, later than previously anticipated. Additionally, slowing consumer demand driven by current high interest rates, high oil prices, a reduction in expected housing permits, slowing personal income and employment growth, and the ongoing conflicts in Ukraine and the Middle East pose risks to the economy.   

Given these continued challenges, the forecast projects that state revenue is expected to decrease by $477 million in the 2023-25 biennium and decrease by $189 million for the 2025-27 biennium compared to the February forecast.  

The majority of this change is due to declines in expected revenue from the state’s capital gains tax and sales tax. These declines are partially offset by positive revenue growth from the estate tax and real estate excise tax (REET) 

More background on the state revenue forecasts can be accessed on our website. 

Near General Fund-State 

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

  • $65.53 billion for the 2023-25 biennium, 0.7% below the previous forecast. However, total revenue for this biennium is still forecasted to grow over the previous 2021-23 biennium.  
  • $71.53 billion for the 2025-27 biennium, 0.3% below the previous forecast.  

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 increased by $24.1 million for the 2023-25 biennia and increased by $33.9 million for the 2025-27 biennia. Forecasted WEIA revenue is now $879.8 million for the 2023-25 biennium and $943.8 million for the 2025-27 biennium.  
  • The forecast of Education Legacy Trust Account (ELTA) revenue decreased by $188.1 million in the 2023-25 biennium and decreased by $118.9 million in the 2025-27 biennium. Forecasted ELTA revenue is now $1.99 billion for the 2023-25 biennium and $2.26 billion for the 2025-27 biennium.  

This latest revenue forecast will be considered as the University of Washington prepares to submit its 2025-27 biennial budget requests to the Legislature this September. These requests will build upon investments made in the 2024 supplemental budget, prioritizing needs across our three campuses. 

The next state revenue forecast will be released in September. Stay tuned for updates on our 2025-27 state budget requests and the next state legislative session beginning in January 2025.