The long-awaited March revenue forecast came out today, delivering a better-than-expected (by us anyway) $861 million bump in anticipated tax collections to support the coming budget. The Economic and Revenue Forecast Council release sums it up:
The Near General Fund-State (Near GF-S) revenue forecast for the 2017-19 biennium has increased by $307 million, and revenue for the 2019-21 biennium has increased by $553.5 million. The Near GF-S includes the General Fund-State, Education Legacy Trust Account and Washington Opportunity Pathways Account and provides the fullest picture of resources available for budget purposes.
The forecast acknowledges some cooling in the economy.
The national economic forecast is similar to the previous forecast, with slightly lower GDP growth than expected in November. Likewise, the state forecast is little changed, with slightly lower personal income and employment than expected in November.
Despite fairly small changes to the economic forecast, stronger-than-expected taxable activity has resulted in increases to forecasted revenue.
Part of the increase is attributed to legislation expanding taxation of online sales.
The full report is here.
Still, as the Associated Press reports, there’s an expectation that it won’t be enough for the Democratic majority in charge of writing the budgets. (Emily Makings at the Washington Research Council pointed out in a blog post yesterday that House and Senate Democrats were anticipating a revenue package to accompany their budget proposals).
From the AP:
Democratic Rep. Timm Ormsby, a member of the council and the chief budget writer for the House, said that while the forecast was good news, “it doesn’t take away from the arithmetic problem that we came here with.”
He said that the budget growth won’t support adequately funding programs in addition to maintaining government services at current levels, including billions put toward the state’s education system. A part of that ongoing cost is the investment the Legislature has made in basic education as part of a multi-year court case that was resolved last year.
“This is about paying the bills and the state’s commitment in a wide variety of areas that we continue to make investments to improve the quality of life of the residents of Washington state,” he said about the need for additional revenue.
Sen. John Braun, the ranking Republican member of the Senate Ways and Means Committee and a fellow member of the council, disagreed, saying there are a number of savings options that don’t hurt services in the budget.
“I see no reason, given the growth of our budget, why we would need new taxes, to both maintain current services and make hopefully smart investments,” he said.
Braun has published a budget primer presenting his case.
Much more on all this in the coming days and weeks.