State Relations

November 19, 2020

State revenue projections increase prior to legislative session in January

The latest economic and revenue forecast released by the Washington State Economic and Revenue Council on Nov. 18 projects revenue collections will increase by more than $634 million for the 2019-20 state budget and $328 million for the 2021-23 biennium, bringing the state’s revenue shortfall resulting from COVID-19 to $2.4 billion. Although this remains a large deficit, it reflects a much improved economic position compared to the previously predicted $9 billion deficit at the onset of the pandemic. Legislators will also have a $3 billion “Rainy Day” reserve account at their disposal as they begin the budget drafting process in January.

The state also saw a slight improvement – though slower than expected – in employment numbers. Public and private-sectors added 18,200 jobs in September and October, and the unemployment rate declined to six percent from the high of 16.3 percent in April.

This forecast accounted for the recent restrictions announced by Governor Jay Inslee, but as we have seen over the last nine months, uncertainty around the virus makes economic predictions difficult. We can expect the state’s economy to remain tenuous as long as the pandemic persists with repercussions lasting for months and years after. However, the November forecast provides some positive economic news as legislative session looms.

Next month the Governor will release his budget proposals — representing the first step in the lengthy 2021-23 biennial budget process. The State House of Representatives and Senate will reconvene for the 2021 legislative session on Jan. 11, which is scheduled to last 105 days. Legislators face tough economic and public health challenges as they work to balance the budget and four-year outlook.

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