Washington has wisely adopted a number of statutory and constitutional requirements that improve budget sustainability. As the Washington Research Council wrote in January, the measures “work when followed.”
Washington’s four-year balanced budget requirement and constitutionally-protected rainy day fund promote state budget sustainability. The requirement that budgets balance over four years helps to limit the use of budget gimmicks and to prevent unsustainable bow wave spending. Reserves improve sustainability by providing a cushion for emergencies and limiting major program cuts during economic downturns. Because the rainy day fund is protected in the constitution, deposits are mandated, and withdrawals are limited.
That four-year balanced budget requirement is key. And the 2019-2021 budget adopted this year doesn’t pass the test. Again, we’ll cite the WRC. In a blog post, Emily Makings writes,
The conference report for the operating budget was released to the public the day before the end of the legislative session. It was accompanied by an estimated outlook based on the conference agreement that indicated that the conference report balanced over four years—the unrestricted ending balance for funds subject to the outlook was estimated to be $102 million in 2021–23.
But in the fog of the last few days of session, some bills were enacted that were not included in the estimated outlook and some bills that were included were not enacted. Additionally, Gov. Inslee vetoed several provisions of the operating budget. Given all that, the official outlook estimates that the budget no longer balances over four years. Instead, it leaves an unrestricted ending balance of negative $58 million in 2021–23.
The “fog” was of lawmakers’ own making, of course. And, as Makings writes, the statute requires the legislature to pass a budget that balances over four years. There’s no requirement that the budget signed by the governor must satisfy the requirement. Here’s a link to the outlook, which was adopted by default because the forecast council lacked a quorum.