Office of Planning & Budgeting

November 21, 2023

November Revenue Forecast Revised Upward for Current Biennium

The Washington State Economic and Revenue Forecast Council (ERFC) released its November revenue forecast on Monday, November 20, 2023. Revenue projections were again revised upward for the current 2023-25 biennium as well as for the 2025-27 biennium.

In September, we highlighted that experts expected revenue to increase over recent projections for the 2023-25 and 2025-27 biennia, returning to levels that had been anticipated in the November 2022 forecast. This growth was driven by the continued strength of the job market.

The November 2023 forecast notes that the Seattle-area consumer price inflation continued to exceed the national average, with the seasonally adjusted CPI rising 4.8% compared to the 3.2% increase in the U.S. City Average index. Given the continued relatively high rate of inflation, the forecast assumes the Federal Reserve will raise interest rates to a range of 5.5% – 5.75% in December, before slowly starting to reduce rates sometime in 2024. Additionally, instability in the commercial real estate sectors, slowing consumer demand, and the ongoing conflicts in Ukraine and the Middle East continue to pose risks to the economy.

Despite these challenges, the forecast projects that state revenue growth is expected to increase by $191 million in the 2023-25 biennium and increase by $579 million for the 2025-27 biennium compared to the September forecast.

As noted, these numbers represent an improvement over the previous forecast. While growth remains slow, the projected increases are driven by the continued strength of the job market, both nationally and at the state level. Washington’s unemployment rate for October was at 3.8%, a slight increase from the all-time Washington state low of 3.6% seen in September.

More background on the state revenue forecasts can be accessed on our website.

Near General Fund-State

Below is a summary of the total preliminary and projected Near General Fund-State (GF-S) revenue for each biennium.

  • $66.88 billion for the 2023-25 biennium, 3.3% over the expected 2021-23 biennium.
  • $71.51 billion for the 2025-27 biennium, 6.9% over the expected 2023-25 biennium.

Some context behind the numbers for Near GF-S accounts from which the University receives funding:

  • Forecasted revenue dedicated to the Workforce Education Investment Account (WEIA) has increased by $5 million for both the 2023-25 and 2025-27 biennia. Forecasted WEIA revenue is now $843 million for the 2023-25 biennium and $879 million for the 2025-27 biennium.
  • The forecast of Education Legacy Trust Account (ELTA) revenue was increased by $6 million in the 2023-25 biennium and $59 million in the 2025-27 biennium. Forecasted ELTA revenue is now $2.14 billion for the 2023-25 biennium and $2.37 billion for the 2025-27 biennium.

Governor Inslee will use this forecast as the basis for his proposed 2024 supplemental budgets, which are expected to be released in December. Stay tuned to the OPBlog for updates on these proposals, as well as the 2024 legislative session, which begins on January 8.