State releases four-year budget outlook. The numbers work, with an asterisk.

The Economic and Revenue Forecast Council released the four-year outlook for the state budget. As the Washington Research Council points out, it comes with a major caveat. 

The balance sheet shows positive ending balances, albeit a very skinny one at the end of FY 2021. That’s probably not reality, though, as the WRC writes.

…that positive ending balance comes with a significant asterisk: The outlook does not include the probable effects of Gov. Inslee’s veto of the professional learning day delay. As passed by the Legislature, the budget assumes savings from this delay of $27.1 million in 2017–19 and $75.8 million in 2019–21.

The budget outlook methodology explains,

The veto does not restore the savings assumed in the 2018 enacted budget so this Outlook includes these savings. However the veto makes it unlikely that the savings assumed will be achieved. The cost of restoring funding for the assumed savings will be reflected in the Outlook prepared in November, along with changes related to caseload and other standard adjustments, which will reflect the preliminary maintenance level budget. Because of the interaction with other policy changes made in Chapter 266, Laws of 2018 (E2SSB 6362), the current projected estimate of restoring these savings is $106 million during the period covered by this Outlook.

Thus, because the ending balance is estimated to be just $88 million in 2019–21 when ignoring the veto, the budget is most likely not truly balanced over four years.

In our foundation report last year, we wrote,

Responsible budget policies, like the four-year balanced budget requirement, help avoid roller coaster effects in the state budget.

With the governor’s veto, this budget cuts it awfully thin.