Governor’s proposed budget would leave a record-level ending balance in 2025, along with a $3+ billion tax increase.

Thanks to the Washington Research Council for catching the latest budget outlook from the Economic and Revenue Forecast Council. Getting right to the bottom line, the WRC writes,

The 2021–23 budget proposal not only balances over four years but would leave an exceptionally large unrestricted ending balance (in funds subject to the outlook) of $1.904 billion in 2023–25.

This is the largest ending balance ever estimated for the end of the four-year period. The next largest was $1.679 billion in the April 2020 outlook. The April ending balance (based on the enacted 2020 supplemental) was so large because the Legislature and the governor anticipated that the economy would continue to worsen due to the pandemic. Because of that, the Legislature deliberately left higher reserves than they otherwise would have and the governor vetoed some spending.

Taxpayers invest heavily in the large balance, the WRC points out, noting a sizable tax increase although none is required to balance the budget.

There is no shortfall in the current budget. Nevertheless, Gov. Inslee’s proposed budget would drain the budget stabilization account (BSA, or the rainy day fund) in 2019–21, including $1.774 billion for transfer to the general fund, and increase taxes by $3.625 billion over the four-year period.

More to come.