OLYMPIA — As Washington lawmakers prepare to release their supplemental budget proposals, they received news Wednesday that state revenue projections increased by more than $2.7 billion than originally expected through mid-2025.
Updated numbers by the Economic and Revenue Forecast Council show that projected revenue collections for the 2021-2023 budget cycle are more than $1.4 billion above what had been forecasted in November. And projections for the next two-year budget cycle that ends in mid-2025 increased by more than $1.3 billion.
Revenues for the current budget cycle that ends mid-2023 are now projected to be nearly $61.7 billion. And projected revenues for the next two-year budget cycle that starts July 1, 2023 are projected to be nearly $64.5 billion.
Steve Lerch, the chief economist and executive director of the council, said that high inflation rates driving up the costs of goods — and in turn money collected by the sales tax and business taxes — is part of what has been driving the increase in revenues, as well as higher than expected growth in both retail and real estate transactions.
Republican legislative members of the Economic and Revenue Forecast Council said in response to the strong growth, tax cuts should be part of any final budget plan presented by majority Democrats.
Lawmakers are more than halfway through the 60-day legislative session that started on Jan. 10, and the Senate is expected to release its supplemental budget plan early next week, followed by the House.
“This is a larger adjustment to the budget than I think any of us anticipated, fortunately to the good,” said Sen. Christine Rolfes, the chief budget writer for Senate Democrats and member of the council.
But she still expressed caution about how to use the influx of revenue, citing ongoing uncertainty about inflation and other potential unknowns that could affect state coffers in the future.
“I think we’re in a good place to be able to meet the challenges coming ahead of us over the next few years,” she said.
Republican Sen. Lynda Wilson said she would continue to advocate for tax relief, including a property tax cut, saying that “some form of tax relief would be very much appreciated right now as we move through this inflationary period.”
The next state revenue forecast will be in June.
