OLYMPIA, Wash. - Washington’s economy continues to improve, with the latest state revenue forecast showing that lawmakers will have more than $3 billion more to work with as they prepare to unveil budget plans next week, plus money the state will receive from the latest federal stimulus package.
Updated numbers by the Economic and Revenue Forecast Council released Wednesday show that projected revenue collections through mid-2023 are more than $1.9 billion above what had been originally forecasted. And projections for the current budget cycle that ends this summer are now $1.3 billion higher than expected.
Democratic Sen. Christine Rolfes, the Senate’s chief budget writer and member of the council, said the good news from the forecast, plus the expected $4.2 billion that the state will be able to use from the federal government, "really puts us in a strong position for recovery."
"We now have a little bit of time and a little bit more resources than we anticipated to plan out a strategic recovery that benefits the whole state," she said. "I think we’re in a really strong place."
The state’s revenue projection through mid-2023 is now down to just $58 million below what it was before the coronavirus pandemic took hold, a near wash in terms of budgets. It’s a dramatic turnaround since last June, when numbers showed that state revenues for the next two-year budget cycle were projected to be nearly $9 billion lower than previous projections had shown.
Revenues for the current budget cycle that ends mid-2021 are now projected to be $52.3 billion, with an ending balance of nearly $3 billion, including reserves. And projected revenues for the next year's budget cycle are projected to total $56.6 billion.
Steve Lerch, the chief economist and executive director of the council, noted that since the last update in November, two federal stimulus bills have passed, vaccines have started being administered, retail sales have been stronger than expected, and there have been strong residential real estate transactions as people continue seek out new living spaces as they work from home.
Lawmakers are in the midst of a 105-day session that ends on April 25. The Democratic-led Senate and House are both expected to release state budget proposals next week and have said the priority will be on helping those most hurt by the pandemic. Tax increases, including a new tax on capital gains, are among the proposals that lawmakers are considering.
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"The good economic news here is not widely felt by every Washingtonian," Democratic Rep. Timm Ormsby, the chief budget writer for the House and member of the council, said of the new forecast. "Everyday working Washingtonians are not seeing these economic gains that are largely being realized by folks that already have means. So in order to be able to be sure that this recovery is widespread, we have to fashion budgets that address that issue."
But Republicans on the council said that a budget can and should be written with existing revenue.
"The last thing we should do is be taxing any money out of the economy at any level, as we want as much of that money being reinvested in our economy as we possibly can," said Republican Rep. Ed Orcutt.
The next state revenue forecast will be in June.