September 21, 2012

WA Revenue Forecast Up Slightly

The Economic Revenue and Forecast Council (ERFC) released its September revenue forecast on the 19th. Believe it or not: Anticipated revenues for the current (2011-13) and upcoming (2013-15) biennia were slightly ahead of the previous forecast.

Although only eight months of the current biennium remain, revenues are running $29 million ahead of predicted levels due to better than anticipated employment numbers, construction activity, and real estate excise tax collections.

Projected revenues for the upcoming 2013-15 biennium (FY14 & FY15) were raised by $23 million; but, as the full forecast and press release note, the downside risks resulting from potentially stagnant employment gains, an extremely weak Washington export market, sovereign European debt crisis, and possible federal fiscal cliff threaten these modest gains.

While ERFC will refine the revenue forecast again in November and the Governor will use it as a basis for her budget, she and the Office of Financial Management (OFM) have already committed any possible additional revenue above current forecasted levels to K12. Revenue projections may have increased slightly with the release of this forecast, but required expenditures in the upcoming biennium will far outweigh potential revenues. OFM projects a $1 billion deficit out the gate.