OLYMPIA – Washington’s projected Near General Fund revenue collections through 2029 decreased by $400 million overall from the September 2024 forecast, according to estimates released today by the Washington State Economic and Revenue Forecast Council.

The forecast is comprised of revenue estimates for the current biennium (2023–25, which ends June 30, 2025), the next biennium (2025–27), and the subsequent biennium (2027–29).

Projected collections for the 2023–25 state budget decreased from the September forecast by $89 million to $66.4 billion.

This forecast also estimates revenue for the next biennium (2025–27) at around $71.4 billion, a decrease of $181million from the September forecast.

The forecast revenue for the 2027–29 biennium is reduced by $131 million, to $76.85 billion..

Quotes

Dave Reich, forecast council executive director, noted some of the reasons behind the changes in the forecast. “Revenue growth continues to be slow, driven by slightly lower retail sales and B&O tax forecasts,” Reich said. “However, economic measures including lower inflation and lower interest rates suggest we will see a pick-up in revenue growth going forward.”

Pat Sullivan, Office of Financial Management director and member of the forecast council, noted that the decreased revenue projections will bring further challenges to the development of the 2025–27 state budget. “We’re facing an increase in forecasted caseloads, as well as rising costs to support essential programs,” Sullivan said. “I have requested savings options from state agencies to help close the budget gap, and those options are currently under review.”

More information about the proposed budget reductions is available on the OFM website.

Why it matters

The forecasts for Near General Fund revenue collections signal the availability of resources for various state services. By law, the governor is required to propose, and the Legislature is required to enact an operating budget that is balanced over four years. The Near General Fund accounts for most of that state operating budget.

A guide to the Washington state budget process can be found on the OFM website.

Transportation revenues also projected

The revenue forecast for the transportation budget was also presented by forecast council Director Reich today, for approval by the Transportation Economic and Revenue Forecast Council. The council was created in a bill enacted in 2023, ESHB 1838.

For the November 2024 forecast, the 2023-25 biennium total transportation revenue estimate is $6.8 billion, which is a $75 million (1.1%) decrease in comparison to the September forecast. This is largely driven by a decrease in motor vehicle fuel tax and toll revenue.

For the 2025-27 biennium, transportation revenues are projected at $7.0 billion, which is $94 million (1.3%) below the September forecast.

What’s next

• OFM is developing Governor Jay Inslee’s proposed 2025–27 budget, which will be published in December.
• The next revenue forecast is required by statute to be completed by March 20, 2025. Revenue review meetings are broadcast on TVW, with scheduling details available beforehand on the ERFC website.

About the Economic and Revenue Forecast Council:

The Economic and Revenue Forecast Council supports statewide goals by accurately forecasting economic activity and state tax revenue for Washington state.  ERFC is comprised of both legislative and executive members and the State Treasurer. Four times a year the organization adopts a bipartisan revenue forecast that is then used to build the state operating and transportation budgets. The ERFC is also charged with providing the state budget outlook to increase transparency and to promote state government financial stability.

About the Office of Financial Management:

The Office of Financial Management provides vital information, fiscal services and policy support that the governor, Legislature and state agencies need to serve the people of Washington.