Office of Planning & Budgeting

October 23, 2019

Background on the State Revenue Forecast

The Office of Planning & Budgeting (OPB) publishes a summary of the state’s quarterly revenue forecasts. This primer provides background on revenue forecast reports, including helpful information about how to interpret and understand their contents.

Who produces the report?

The Washington State Economic and Revenue Forecast Council (ERFC) produces the revenue forecast, and is comprised of both bipartisan legislative and executive members and the State Treasurer.

What does the revenue forecast show?

The quarterly revenue forecast seeks to predict how much tax revenue (or income) will be remitted to Washington state during the given timeframe. This includes funding projections from a variety of sources, including income, property, estate, and sales taxes. Since revenue from these sources is affected by other economic factors (employment, income, home prices, etc.) the forecast generally includes a wider conversation on the health of national, state, and local economies.

Why is it helpful?

Washington state is unique in this approach to revenue forecasting in that the forecast is nonpartisan and is used by both the executive and legislative branches in budget preparation. The Governor uses the November forecast to inform their proposed budgets to the legislature, and the legislature uses the February forecast to inform their final budget recommendations. It is helpful for the UW to monitor the report, as changes in state revenue may be tied to changes in appropriations to the University as part of the state budgeting process.

What accounts support the University of Washington?

  • Near General Fund – State (NGF-S): The combination of the State General Fund, Education Legacy Trust Account, and Opportunity Pathways Account.
    • General Fund – State (GF-S): Created in 1907, the general fund serves to account for all financial resources of the state except those required to be accounted for in another fund. The general fund is the principal state fund supporting the operation of the state. It is funded through taxes, federal grants-in-aid, charges and miscellaneous revenue, licenses, permits, fees and interest income. The vast majority of state funding for the University comes from GF-S.
    • Education Legacy Trust Account (ELTA): Created in 2005, this account can be used only for support of the K-12 schools, and for expanding access to higher education through funding for new enrollments, financial aid, and other educational improvement efforts. The ELTA is funded through estate taxes and interest earnings.
    • Opportunity Pathways Account (OPA): Created in 2010, this account is intended for the recruitment of entrepreneurial researchers, innovation partnership zones, research teams, early childhood education, higher education grants and scholarship programs, and charter schools. This is funded through lottery revenue.
  • Workforce Education Investment Account: Created in 2019, the Workforce Education Investment account can be used only for higher education programs, higher education operations, higher education compensation, and state-funded student aid programs. The Account is funded through a business and occupation tax on large technology companies, called the “workforce education investment surcharge.”
  • Other accounts: The University receives several appropriations from special state appropriated accounts that are not as visible or contemplated at all in the revenue forecast. These include amounts for the School of Public Health Department of Environmental and Occupational Health Sciences (DEOHS) (Accident and Medical Aid Accounts), funding for marijuana research and education (Dedicated Marijuana Account), funding for ocean acidification and management research (Biotoxin Account, Aquatic Lands Enhancement Account), and to support aerospace initiatives (Economic Development Strategic Reserve Account).

Please feel free to contact Jessie Friedmann (jfriedm@uw.edu) with any questions.