Office of Planning & Budgeting

February 16, 2024

February Revenue Forecast

February Revenue Forecast Again Revised Upward for Current Biennium

The Washington State Economic and Revenue Forecast Council (ERFC) released its February revenue forecast on Wednesday, February 14, 2024. Revenue projections were again revised upward for the current 2023-25 biennium as well as for the 2025-27 biennium.

In November, we highlighted that experts expected revenue to increase over recent projections for the 2023-25 and 2025-27 biennia. This growth was driven by the continued strength of the job market.

The February 2024 forecast notes that the Seattle-area consumer price inflation continued to exceed the national average, with the seasonally adjusted CPI rising 4.4% compared to the 3.4% increase in the U.S. City Average index. However, inflation continues to slow, and it is expected that the Federal Reservice will start reducing interest rates in the second quarter of 2024. Meanwhile, slowing consumer demand driven by high interest rates 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 $122 million in the 2023-25 biennium and increase by $215 million for the 2025-27 biennium compared to the November forecast.

As noted, these numbers represent an improvement over the previous forecast. While revenue 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 December was at 4.2%, a slight increase from previous months.

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.

  • $67 billion for the 2023-25 biennium, 0.2% over the expected 2023-25 biennium.
  • $71.72 billion for the 2025-27 biennium, 0.3% over the expected 2025-27 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 $13 million for the 2023-25 biennia and increased by $31 million for the 2025-27 biennia. Forecasted WEIA revenue is now $856 million for the 2023-25 biennium and $910 million for the 2025-27 biennium.
  • The forecast of Education Legacy Trust Account (ELTA) revenue was increased by $31.5 million in the 2023-25 biennium and increased by $6 million in the 2025-27 biennium. Forecasted ELTA revenue is now $2.17 billion for the 2023-25 biennium, and $2.38 billion for the 2025-27 biennium.

The Washington State House of Representatives and Senate will release their proposed 2024 supplemental budgets later this month. A final compromise supplemental budget is expected to be adopted in early March before the end of the legislative session. Stay tuned to the OPBlog for updates on these proposals.