The Economic and Revenue Forecast Council adopted an updated state economic and revenue forecast this morning, which the governor will use to write his 2021-23 operating budget proposal in mid-December.

The revenue report improved the bottom line by $634 million in the current biennium and $328 million in the next biennium. A press release from the state Office of Financial Management can be found here. When combined with last week’s caseload forecast showing reduced demand for state services, the state’s three-year budget shortfall – in June thought to be $9 billion — could be as low as $3 billion.

However, optimism is dampened by high levels of uncertainty, with more than five months still to go before the Legislature sends a budget to the governor.

The economic forecast takes into account the projected impacts of Boeing’s decision to relocate 787 assembly out of Washington and their plans to make significant employee reductions. It does not account for the new restrictions on some businesses announced by Governor Inslee on November 16th in response to spiking COVID-19 infections. The forecast assumes a COVID vaccine will become available by mid-2021.

Following the governor’s budget proposal in December, the Legislature will convene its 105-day session on Jan. 11 to begin crafting its proposals.