State Relations

March 17, 2021

Session news: Substantial increase in state revenue as legislators finalize draft budgets

The March economic and revenue forecast published by the Washington State Economic and Revenue Council today shows that general fund state revenue collections will increase by $1.34 billion for the 2019-21 biennium and $1.949 billion for the 2021-23 biennium. These amounts essentially constitute a full recovery to the February 2020, pre-COVID forecast, which was used as a basis for the current state budget. 

The state’s unemployment rate declined to 5.6 percent in February, a significant reduction from the historic high of 16.3 percent in April 2020. However, the job market continues to struggle in sectors hit hardest by the pandemic such as hospitality.

Revenue forecasting remains challenging due to the unpredictable nature of the COVID-19 pandemic, but today’s projections reflect a significantly improved economy, especially compared to the $9 billion budget deficit predicted at the height of the pandemic. While today’s forecast reflects federal relief funds provided to the state in December, additional federal aid provided this month are expected to help higher education institutions and overall economic growth this year and next.

The revenue forecast provides positive news as the House and Senate draft their biennial operating budget proposals for the 2021-23 biennium. This improved outlook indicates that significant statewide budget cuts are no longer likely. Budget writers will now use the March forecast to fine-tune their budgets before their release anticipated next week.

Once initial proposals are released, the House and Senate will work toward a compromise budget. Final operating and capital budgets must be voted on and sent to the Governor’s desk before legislative session ends on April 25 to avoid a special session.

To view the Washington State Economic and Revenue Forecast Council’s complete March report, click here. The UW Office of Planning and Budgeting has posted additional details.