Washington’s state government is awash in cash. As legislators prepare a supplemental budget, we offer a gentle reminder: Just because you have money, that doesn’t mean you have to spend it.
On Wednesday, the state revenue forecast from the Economic and Revenue Forecast Council showed that projected revenue through mid-2025 is $2.7 billion more than previously expected. Projections for state revenue through mid-2023 — the end of the current budget cycle — have increased by $1.3 billion since November, reaching $61.7 billion.
A well-managed response to the COVID-19 pandemic helped limit the impact of economic shutdowns; an influx of stimulus cash from the federal government added to the coffers; and inflation has increased prices — and, therefore, revenue from sales tax and business taxes. Officials say there also has been higher-than-expected growth in real estate transactions.
“This is a larger adjustment to the budget than I think any of us anticipated, fortunately to the good,” said Sen. Christine Rolfes, a Democrat from Bainbridge Island and the chief budget writer in the Senate. “I think we’re in a good place to be able to meet the challenges coming ahead of us over the next few years.”
The revenue forecast arrives as legislative Democrats prepare to unveil budget proposals, likely today. During short, even-year legislative sessions, lawmakers are tasked with producing supplemental budgets to fill gaps in the two-year operating and capital budgets that were finalized last year.
Indeed, there are priorities that warrant increased spending. In December, Gov. Jay Inslee submitted a supplemental budget request with spending for climate initiatives, including rebates on electric vehicles; salmon habitat and conservation efforts; and supported and affordable housing to address a crisis of homelessness.
“We have to be big, and we have to be bold this year,” Inslee said at the time. “The moment calls for boldness and it calls for action that is at a scale commensurate with the challenges that we face.”
That is an effective use of a governor’s bully pulpit, and Inslee makes a strong case for addressing those challenges. But some prudence also is required; inflation is digging into the wallets of Washington taxpayers, and the state operating budget for the current biennium already represents a 9.2 percent increase over the previous two-year budget.
Given those realities, legislative Republicans say they will push for tax cuts in any budget proposal. Sen. Lynda Wilson, R-Vancouver, said she will advocate for a reduction in property tax: “Some form of tax relief would be very much appreciated right now as we move through this inflationary period.”
Rep. Drew Stokesbary, R-Auburn, said: “It is past time for working Washingtonians to share in the state’s good economic fortune. … With record tax collections and a historic budget surplus, there’s never been a better time to deliver real, meaningful tax relief to working families.”
Indeed, taxpayers should share in the state’s good fortune. Social issues such as the unhoused population and climate initiatives demand attention, and lawmakers should ensure a robust reserve in order for the state to meet the next crisis. But relief for taxpayers would demonstrate that elected officials remember who they are working for.
With a lingering pandemic, it is encouraging that the state’s finances remain on solid footing. But, as taxpayers understand, when money is available, that doesn’t mean you have to spend it.