The state’s Economic and Revenue Forecast Council today produced its first official projection of state revenues since the onset of the COVID recession. An earlier unofficial projection of a decline in tax collections of $7 billion through June 30, 2023 has been revised to $8.8 billion in the quarterly revenue review. Of that, $4.5 billion is projected to be seen in the current biennium and $4.3 billion is projected for the two-year budget cycle that begins on July 1, 2021.
You can find the press release from the state budget office here.
During Washington state economist Steve Lerch’s presentation on the revenue review to the council, he presented a number of economic indicators – consumer confidence, small business optimism, and employment, noting they declined by historic proportions in March and April and then showed slight recovery in May. He also highlighted job openings in Seattle and statewide which lag behind national trends. While future growth is forecasted, it will take considerable time to return to previous levels for these economic indicators.
It should also be noted that the Workforce Education Investment Account, which funds the Washington College Grant and WSU’s College of Medicine in addition to a number of higher education programming, is forecasted to reduce for both the current biennium and 21-23 biennium.
The governor and legislative leaders are contemplating a special session of the Legislature to take actions to begin to close the budget shortfall. The revenue forecast provides fundamental details to inform that decision.