Yesterday’s $600 million revenue forecast boost has to be considered good news for lawmakers looking to write a budget and go home. Well, generally, yes. But, as Jerry Cornfield writes in the Everett Herald, it’s not an unmixed blessing.
The latest revenue forecast for the state is presenting Democratic budget writers in the House and Senate with a new challenge.
Too much money.
The Washington Research Council reports, as we wrote yesterday,
The 2019–21 biennial budget enacted last year was based on the March 2019 NGFO revenue forecast and about $1 billion in new taxes (including the workforce education investment surcharges). Given economic changes since the budget’s adoption, the Legislature now has $2.158 billion more to work with (from funds subject to the outlook) over the four-year period (through 2021–23). Most of that ($1.454 billion) comes from economic changes to the forecast for 2019–21.
That’s a lot, enough to fuel temptation. Cornfield writes it’s a familiar challenge.
Majority Democrats, with the support and encouragement of Democratic Gov. Jay Inslee, have demonstrated a talent in recent years for spending what the economy generates after making voter-required deposits in emergency reserves.
In 2020, they’ve made clear they want to continue to crank up funding on a slew of existing and new programs and services. This new forecast means they’ll have another pile of dollars with which to fill existing pots higher or to start filling new ones.
That means for those writing the budget, the chore got harder not easier.
The asks will easily exceed available resources. And, of course, not everyone will want to spend it all. Cornfield draws on a statement by Senate Ways and Means chair Christine Rolfes,
“This is certainly good news and another sign of the strength of Washington’s economy,” she began, “but we must continue to be cautious and embrace responsible fiscal policy as we continue to address our communities’ pressing needs.”
The Reflector reports one key state senator sees an opportunity for car tab relief.
State Sen. John Braun, R-Centralia, said in a Wednesday press release that an updated state revenue forecast showing an estimated gain of $1.5 billion over predictions is additional proof that lawmakers should provide residents with the $30 vehicle tabs they voted for through Initiative 976.
The Association of Washington Business has a good post on the forecast, which points out comments from a Republican House member.
Rep. Ed Orcutt, R-Kalama, saw the revenue boost through a different lens: Tax relief.
Orcutt highlighted the state’s property tax formula, which was changed in 2017 and 2018 when lawmakers overhauled the public school budget as a result of the McLeary lawsuit.
“Because some of this additional revenue is being generated by property taxes, we should be looking at some property tax relief,” Orcutt said.
This short AWB video effectively summarizes what happened yesterday.
AWB concludes the video by noting the additional revenue “bolsters the argument” that no new taxes are required this session.
As always, we caution fiscal restraint and remind everyone that yesterday’s news came with this caution: “The level of uncertainty in the baseline remains elevated, with downside risks outweighing upside risks.”