State Relations

June 18, 2020

Two year economic forecast confirms steep decline in state revenue

The Washington State Economic and Revenue Forecast Council released their June quarterly report yesterday showing the impacts of COVID-19 on the economy. The Council predicts a staggering $4.5 billion revenue shortfall for the current 2019-21 biennium. The state’s General Fund has a cumulative shortfall of approximately $452 million (5.6%) since February 11.

Washington employment numbers have also seen sharp declines. In April, an unprecedented 468,800 jobs were lost. Numbers increased slightly in May, but the total decline in employment across all sectors since February is 841,200.

There is one bright spot. According to the Council, the state is seeing an increase in cannabis excise tax and license fee collections. They also reported a small uptick in consumer confidence and small business optimism and sales expectations.

State lawmakers are expected to go into special session in late summer or early fall to address the budget crisis. Before making budget cuts or new revenue decisions, many lawmakers are working to determine what federal aid might be available to help the state deal with the crisis. They are also monitoring pandemic and economic recovery numbers. A decision on the timing of special session could come as early as next week.

Additionally, Gov. Jay Inslee announced he is canceling raises for approximately 5,600 state employees and 40,000 state employees will be required to take weekly furlough days through the fall. These actions will save the state $55 million over the next year. The directive does not apply to higher education institutions. Leadership at the UW—with feedback from the University community—are figuring out next steps.

To view the complete Washington State Economic and Revenue Forecast Council April report, click here.

The UW community continues to navigate through these difficult and confusing times, and resources have been developed to help guide students, faculty, and staff. For the many questions and concerns that have emerged, please visit the UW’s COVID-19 FAQ page for updates and resources as they become available.