Yesterday we posted the side-by-side comparison of House- and Senate-passed budgets prepared by the Washington Research Council. The WRC presents its more detailed analysis of the Senate budget. Although we know that revenue growth has been steady since the Legislature passed its biennial budget last year, it’s still a bit startling to realize that the spending increase in the proposed supplemental budget represents a nearly 21% increase over the previous biennium. As the WRC writes, it’s been a long time since we’ve seen numbers like that.
Given the forecast revenue increases since the 2019–21 biennial operating budget was enacted last year, the Senate-passed supplemental operating budget would not rely on new taxes and it would not make appropriations from the rainy day fund.
It would increase 2019–21 appropriations from funds subject to the outlook plus the workforce education investment account (NGFO+WEIA) by $1.132 billion. This would mean that 2019–21 appropriations would increase by 20.9 percent over 2017–19. Accounting for inflation, this is the largest percentage spending increase in at least 40 years.
The WRC notes that the budget–barely–balances over four years.
The Senate budget would balance over four years, but it would leave just $12 million as the unrestricted NGFO ending balance in 2021–23.
Overall, the WRC concludes,
Although it is discouraging that the Senate leaves such a low unrestricted balance over four years, it is good that the Senate would not make appropriations from the rainy day fund (which would have a balance of $2.804 billion in 2021–23). Additionally, the $200 million the Senate would set aside for later (in the climate resiliency and UW behavioral health hospital ac- counts) could be used for other purposes in the event of a recession. These measures would help temper the probable unsustainability of the large spending increases. Still, it would be better if the Legislature moderated the spending increases in this supplemental budget year.
The advice recalls that offered by state Treasurer Duane Davidson.
Add the economic risks associated with the coronavirus to sustainability concerns. We anticipate the WRC will prepare a similar analysis of the House budget. As Jerry Cornfield reports in the Everett Herald, things are now proceeding quickly.
Conference committees are starting to form and meet to reconcile differences in operating and transportation budgets passed by each chamber. That work needs to be pretty much finished by Monday to get everything voted on before adjourning in eight days.
More later.
