Skip to content
Blog

Tag: State Legislature

March State Revenue Forecast Steady for Current Biennium, Revised Downward for the 2025-27 and 2027-29 Biennia

Posted on

The Washington State Economic and Revenue Forecast Council (ERFC) released its March 2025 revenue forecast on Tuesday, March 18. Revenue projections were steady for the current 2023-25 biennium but down for the upcoming 2025-27 and 2027-29 biennia.

Overall, the forecast projects that state revenue will increase by $54 million for the current 2023-25 biennium but decrease by $479 million for the 2025-27 biennium and $420 million for the 2027-29 biennium compared to the September forecast.

In November, we highlighted that the ERFC expected revenue to decline slightly compared to previous projections for the current and upcoming biennia. This was driven by declines in the State’s sales and business and occupation (B&O) taxes as well as declines in lottery revenue. These declines were partially offset by gains in other areas. The March 2025 forecast continues to identify decreasing sales and B&O tax revenue as a significant concern, as well as decreased interest revenue from state reserves.

On the positive side, the March 2025 forecast notes that inflation is slowing. The Seattle-area consumer price inflation (CPI) rose less than the national average, with the seasonally adjusted CPI rising 2.5% compared to the 2.8% increase in the U.S. City Average index. However, uncertainty regarding tariffs, federal workforce reductions and budget cuts, high interest rates, and the ongoing conflicts in Ukraine and the Middle East all pose risks to the economy. Given these factors, ERFC believes the Federal Reserve will act cautiously, with only a single interest rate cut expected in 2025.

General Fund-State Revenue

Below is the total preliminary and projected General Fund-State (GF-S) revenue for each biennium:

  • $66.45 billion for the 2023-25 biennium, 0.1% above the previous forecast.
  • $70.95 billion for the 2025-27 biennium, 0.7% below the previous forecast.
  • $76.43 billion for the 2027-29 biennium, 0.5% below the previous forecast.

Below is the total preliminary and projected GF-S revenue for accounts from which the University receives dedicated funding:

  • Forecasted revenue dedicated to the Workforce Education Investment Account (WEIA) has increased by $32.9 million for the 2023-25 biennium but decreased slightly by $2.1 million for the 2025-27 biennium and $4.5 million for the 2027-29 biennium. Forecasted WEIA revenue is now $914.6 million for the 2023-25 biennium, $942.6 million for the 2025-27 biennium, and $1.01 billion for the 2027-29 biennium.
  • The forecast for Education Legacy Trust Account (ELTA) revenue has increased by $29.9 million in the 2023-25 biennium, $181.3 million in the 2025-27 biennium, and $166.7 million in the 2027-29 biennium. Forecasted ELTA revenue is now $2.12 billion for the 2023-25 biennium, $2.48 billion for the 2025-27 biennium, and $2.71 billion for the 2027-29 biennium.

2025-27 State Operating Budget

The March revenue forecast will inform the 2025-27 biennial operating, capital, and transportation budgets. Proposed budgets are expected to be released by House and Senate leadership the week of March 24.

The revenue projections further strain Washington’s operating budget, which faces a projected deficit of over $12 billion. This deficit is the result of several factors, including increasing demand for state services, rising costs and inflation, and decreasing revenue, as well as newly negotiated collective bargaining agreements for state workers. The Legislature will likely rely on a mix of budget cuts, revenue increases, and reserve drawdowns to balance the budget.

Stay tuned for updates on budget proposals, as well as the final compromise budgets, which are expected to be adopted before the end of the legislative session on April 27.

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

November Revenue Forecast Down Slightly for Current and 2025-27 Biennia, Further Straining State Budget

Posted on

The Washington State Economic and Revenue Forecast Council (ERFC) released its November revenue forecast on Wednesday, November 20, 2024. Revenue projections were down slightly for the current 2023-25 biennium as well as for the upcoming 2025-27 biennium.

In September, we highlighted that experts expected revenue to remain steady relative to previous projections for the current and upcoming biennia. Declines in expected revenue from the State’s sales tax were largely offset by positive revenue growth from the estate tax and real estate excise tax (REET).

The November 2024 forecast notes that inflation is slowing but that Seattle-area consumer price inflation (CPI) continues to exceed the national average, with the seasonally adjusted CPI rising 3.0% compared to the 2.6% increase in the U.S. City Average index. With inflation slowing, the Federal Reserve recently reduced interest rates by a quarter percentage point. Another rate cut is expected during the Federal Reserve’s December meeting, with the potential for additional rate cuts next year. However, current high interest rates, the ongoing conflicts in Ukraine and the Middle East, and the potential for tariffs imposed by the incoming Trump administration all pose risks to the economy.

Given these factors, the forecast projects that state revenue will decrease by $89 million for the current 2023-25 biennium and decrease by $181 million for the 2025-27 biennium compared to the September forecast.

These revisions are due to declines in expected revenue from the State’s sales and business and occupation (B&O) tax as well as from the State’s lottery. These declines are partially offset by positive revenue growth in other areas.

the revenue revisions for November are relatively modest, the projections further strain Washington’s $72 billion biennial budget. Currently, the Governor’s Office of Financial Management is projecting between a $10 and $12 billion budget deficit over the next four years. This projected deficit is the result of several factors including increasing demand for state services, rising costs and inflation, and decreasing revenue, as well as newly negotiated collective bargaining agreements for state workers. The Legislature could rely on a mix of budget cuts and revenue increases to balance the budget when it meets early next year. As such, OFM recently asked state agencies to prepare initial plans for budget reductions.

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.

  • $66.39 billion for the 2023-25 biennium, 0.1% below the previous forecast. However, total revenue for this biennium is still forecasted to grow over the previous 2021-23 biennium.
  • $71.43 billion for the 2025-27 biennium, 0.3% above 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 decreased by $4.0 million for the 2023-25 biennia and by $7.6 million for the 2025-27 biennia. Forecasted WEIA revenue is now $881.8 million for the 2023-25 biennium and $944.7 million for the 2025-27 biennium.
  • The forecast for Education Legacy Trust Account (ELTA) revenue has increased by $48.5 million in the 2023-25 biennium but decreased by $54.2 million in the 2025-27 biennium. Forecasted ELTA revenue is now $2.09 billion for the 2023-25 biennium, and $2.3 billion for the 2025-27 biennium.

The November revenue forecast will inform Governor Inslee’s 2025-27 biennial budget proposals, which will be released in December. This is Governor Inslee’s final proposal, as Governor-elect Bob Ferguson will be taking office in January. Stay tuned for updates on those requests, as well as the upcoming legislative session, which begins January 13, 2025.

September Revenue Forecast Flat for Current and 2025-27 Biennia 

Posted on

The Washington State Economic and Revenue Forecast Council (ERFC) released its September revenue forecast on Friday, September 27, 2024. Revenue projections were relatively flat for the 2023-25 biennium as well as for the upcoming 2025-27 biennium.  

In June, we highlighted that experts expected revenue to fall from previous projections for the 2023-25 and 2025-27 biennia. This reduction was driven by declines in revenue collections from the State’s capital gains tax and sales tax.  

The September 2024 forecast notes that inflation is slowing but that Seattle-area consumer price inflation (CPI) continues to exceed the national average, with the seasonally adjusted CPI rising 3.1% compared to the 2.5% increase in the U.S. City Average index. With inflation slowing, the Federal Reserve recently reduced interest rates by half a percentage point. Additional rate cuts are expected later this year. However, current high interest rates, the ongoing conflicts in Ukraine and the Middle East, and the Boeing machinist and dockworkers strikes all pose risks to the economy. 

Given these factors, the forecast projects that state revenue is expected to decrease by $49.2 million for the current 2023-25 biennium while increasing $79.1 million for the 2025-27 biennium compared to the June forecast. 

These small revisions are due to declines in expected revenue from the State’s 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.  

  • $66.48 billion for the 2023-25 biennium, 0.1% below the previous forecast. However, total revenue for this biennium is still forecasted to grow over the previous 2021-23 biennium.  
  • $71.61 billion for the 2025-27 biennium, 0.1% above 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 $6.0 million for the 2023-25 biennia and increased by $8.5 million for the 2025-27 biennia. Forecasted WEIA revenue is now $885.8 million for the 2023-25 biennium and $952.3 million for the 2025-27 biennium.  
  • The forecast of Education Legacy Trust Account (ELTA) revenue has increased by $54.1 million in the 2023-25 biennium and increased by $96.9 million in the 2025-27 biennium. Forecasted ELTA revenue is now $2.04 billion for the 2023-25 biennium and $2.36 billion for the 2025-27 biennium.  

The next revenue forecast will be released in November and will inform the development of Governor Inslee’s 2025-27 biennial budget requests to the Legislature, the final of his term in office. Stay tuned to for updates on our 2025-27 state budget requests and the next state legislative session beginning in January 2025. 

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

Posted on

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. 

February Revenue Forecast Again Revised Upward for Current Biennium

Posted on

The Washington State Economic and Revenue Forecast Council (ERFC) released its February revenue forecast on Wednesday, February 14, 2024. Revenue projections were again revised upward for the current 2023-25 biennium as well as for the 2025-27 biennium.

In November, we highlighted that experts expected revenue to increase over recent projections for the 2023-25 and 2025-27 biennia. This growth was driven by the continued strength of the job market.

The February 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. However, inflation continues to slow, and it is expected that the Federal Reserve will start reducing interest rates in the second quarter of 2024. Meanwhile, slowing consumer demand driven by high interest rates and the ongoing conflicts in Ukraine and the Middle East continue to pose risks to the economy.

Despite these challenges, the forecast projects that state revenue growth is expected to increase by $122 million in the 2023-25 biennium and increase by $215 million for the 2025-27 biennium compared to the November forecast.

As noted, these numbers represent an improvement over the previous forecast. While revenue growth remains slow, the projected increases are driven by the continued strength of the job market, both nationally and at the state level. Washington’s unemployment rate for December was at 4.2%, a slight increase from previous months.

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.

  • $67 billion for the 2023-25 biennium, 0.2% over the expected 2023-25 biennium.
  • $71.72 billion for the 2025-27 biennium, 0.3% over the expected 2025-27 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 increased by $13 million for the 2023-25 biennia and increased by $31 million for the 2025-27 biennia. Forecasted WEIA revenue is now $856 million for the 2023-25 biennium and $910 million for the 2025-27 biennium.
  • The forecast of Education Legacy Trust Account (ELTA) revenue was increased by $31.5 million in the 2023-25 biennium and increased by $6 million in the 2025-27 biennium. Forecasted ELTA revenue is now $2.17 billion for the 2023-25 biennium and $2.38 billion for the 2025-27 biennium.

The Washington State House of Representatives and Senate will release their proposed 2024 supplemental budgets later this month. A final compromise supplemental budget is expected to be adopted in early March before the end of the legislative session. Stay tuned to the OPBlog for updates on these proposals.

 

 

 

 

November Revenue Forecast Revised Upward for Current Biennium

Posted on

The Washington State Economic and Revenue Forecast Council (ERFC) released its November revenue forecast on Monday, November 20, 2023. Revenue projections were again revised upward for the current 2023-25 biennium as well as for the 2025-27 biennium.

In September, we highlighted that experts expected revenue to increase over recent projections for the 2023-25 and 2025-27 biennia, returning to levels that had been anticipated in the November 2022 forecast. This growth was driven by the continued strength of the job market.

The November 2023 forecast notes that the Seattle-area consumer price inflation continued to exceed the national average, with the seasonally adjusted CPI rising 4.8% compared to the 3.2% increase in the U.S. City Average index. Given the continued relatively high rate of inflation, the forecast assumes the Federal Reserve will raise interest rates to a range of 5.5% – 5.75% in December, before slowly starting to reduce rates sometime in 2024. Additionally, instability in the commercial real estate sectors, slowing consumer demand, and the ongoing conflicts in Ukraine and the Middle East continue to pose risks to the economy.

Despite these challenges, the forecast projects that state revenue growth is expected to increase by $191 million in the 2023-25 biennium and increase by $579 million for the 2025-27 biennium compared to the September forecast.

As noted, these numbers represent an improvement over the previous forecast. While growth remains slow, the projected increases are driven by the continued strength of the job market, both nationally and at the state level. Washington’s unemployment rate for October was at 3.8%, a slight increase from the all-time Washington state low of 3.6% seen in September.

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.

  • $66.88 billion for the 2023-25 biennium, 3.3% over the expected 2021-23 biennium.
  • $71.51 billion for the 2025-27 biennium, 6.9% 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 increased by $5 million for both the 2023-25 and 2025-27 biennia. Forecasted WEIA revenue is now $843 million for the 2023-25 biennium and $879 million for the 2025-27 biennium.
  • The forecast of Education Legacy Trust Account (ELTA) revenue was increased by $6 million in the 2023-25 biennium and $59 million in the 2025-27 biennium. Forecasted ELTA revenue is now $2.14 billion for the 2023-25 biennium and $2.37 billion for the 2025-27 biennium.

Governor Inslee will use this forecast as the basis for his proposed 2024 supplemental budgets, which are expected to be released in December. Stay tuned to the OPBlog for updates on these proposals, as well as the 2024 legislative session, which begins on January 8.

 

September Revenue Forecast Revised Upward for Current Biennium, Returning to Previously Projected Levels Despite Slowing Growth

Posted on

The Washington State Economic and Revenue Forecast Council (ERFC) released its September revenue forecast on Tuesday, September 26, 2023. Revenue projections were again revised upward for the 2023-25 and 2025-27 biennia, as well as for the 2021-23 biennium that ended on June 30.

In June, we highlighted that experts expected revenue to increase slightly over the March projection for the 2023-25 and 2025-27 biennia, though the forecast was still lower than what had been predicted last November. This change upward was driven by stronger than expected capital gains tax collections, slightly higher construction activity and sales and use tax collections, and the continued strength of the job market.

The September forecast notes that the Seattle-area consumer price inflation continued to exceed the national average, with the seasonally adjusted CPI rising 5.4% compared to the 3.7% increase in the U.S. City Average index. Given the continued high rate of inflation, the forecast assumes the Federal Reserve will raise interest rates to a range of 5.5% – 5.75% in November, before starting to reduce rates sometime in 2024. Additionally, the potential for a federal government shutdown, instability in the banking and commercial real estate sectors, the resumption of student loan repayments, and the ongoing conflict in Ukraine continue to pose risks to the economy.

Despite these challenges, the forecast projects that state revenue growth is expected to increase by $663 million in the 2023-25 biennium and increase by $437 million for the 2025-27 biennium compared to the June forecast. Additionally, revenue for the just concluded 2021-23 biennium increased by $265 million.

As noted, these numbers represent an improvement over the previous forecast. While growth is slowing, the projected increases are driven by the continued strength of the job market, both nationally and at the state level. Washington’s unemployment rate for August remained at 3.6%, an all-time low.

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. These numbers are now similar to those projected last November before the decline forecasted in March.

  • $64.75 billion for the 2021-23 biennium, 21.9% over the 2019-21 biennium.
  • $66.69 billion for the 2023-25 biennium, 3.0% over the expected 2021-23 biennium.
  • $70.93 billion for the 2025-27 biennium, 6.3% 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 increased by $13 million in the 2021-23 biennium, $28 million in the 2023-25 biennium, and $31 million in the 2025-27 biennium. Forecasted WEIA revenue is now $779 million for the 2021-23 biennium, $838 million for the 2023-25 biennium, and $874 million for the 2025-27 biennium.
  • The forecast of Education Legacy Trust Account (ELTA) revenue was increased by $141 million in the 2021-23 biennium. Forecasted ELTA revenue is now over $2.57 billion for the 2021-23 biennium, $2.14 billion for the 2023-25 biennium, and $2.31 billion for the 2025-27 biennium.

The next state revenue forecast will be released in November, which the Governor will use as a basis for his proposed 2024 supplemental budgets. Stay tuned to the OPBlog for updates as we prepare for the 2024 legislative session.

Washington Guaranteed Education Tuition Program Reopens after Two Year Freeze

Posted on

According to a recent story by The Seattle Times, Washington’s Guaranteed Education Tuition (GET) program officially reopened on November 1. The GET program is a college-savings program. Under GET, families purchase GET units, currently valued at $113, to prepay the cost of tuition. GET account holders are guaranteed that 100 units will cover one year of full-time, undergraduate, resident tuition and fees at Washington’s most expensive public university at any point in the future.

In July 2015, the GET Committee authorized a two-year delay in most new unit sales, given the legislature’s decision to decrease resident undergraduate tuition at public institutions. During this time, GET was required to complete a legislatively mandated study to evaluate its future. The GET Committee voted to reopen the program earlier this summer and to “rebase” all existing accounts. Customers who held accounts prior to the freeze were given additional units because the unit payout value was reset to reflect current, lower, tuition. GET is now available to people who want to start new accounts and those who want to continue buying GET units.

The legislatively mandated study also tasked the GET Committee with looking into implementing other college savings options, such as a “529” college savings plan (which refers to Section 529 of the Internal Revenue Code). As a result of that effort, a new 529 savings plan, to be offered alongside GET, is currently scheduled to open in early 2018.

2017 Legislative Session Update

Posted on

Wednesday, March 8, marked the last day for bills to be considered in (and pass out of) their house of origin during the 2017 Washington state legislative session. This is an important session cutoff, as it narrows the field of bills and helps us home I on those that may have traction towards become a law. As a reminder, however, bills can be introduced and brought back to life at any point in session if they are deemed essential towards implementation of the budget.

Throughout the 2017 session, the Office of Planning & Budgeting (OPB) has been actively tracking legislation that could directly impact the University community. At this point in session, OPB would like to provide a mid-session update by the numbers.

  • 64 – Today, March 13, marks the 64th day of the 105-day regular session. (Note: Due to significant financial pressures, especially those associated with fully funding K-12 education under the McCleary decision, it is likely that the legislature will require one or more special sessions on top of the 105-day regular session.)
  • 88 – The number of fiscal note requests responded to by OPB. Fiscal notes are requests from the state Office of Financial Management to evaluate the financial impact a bill would have on the UW.
  • 409 – The total number of bills being tracked by OPB that could impact the UW community.
  • 124 – The number of bills identified by OPB as “alive”, meaning those that passed out of the house of origin before the cutoff date.

Our focus at OPB now shifts from gaining a big picture view of all bills that may impact the University, to focusing on the specific pieces of legislation that may have enough momentum to pass into law.

Stay tuned to the OPBlog for updates regarding budget proposals from the House and Senate. Briefs on the Governor’s budget proposals, as well as information on all future budget proposals can be found here on the OPB Briefs webpage.