On Friday, September 25, the Washington State Economic and Revenue Forecast Council released its third revenue forecast for 2026. The forecast shows that tax collections are about $22 million higher for the current biennium, which ends June 30, 2027, compared with the June forecast. However, the increase is seen in the Education Legacy Trust Account and Washington Opportunity Pathways Account. In contrast, the general fund has decreased by $55 million and the Workforce Education Investment Account, which funds many higher education needs and priorities, is down $70 million.
As such, the state is expected to have operating and transportation budget deficits in fiscal year 2028 and the state legislature, which convenes again starting on Monday, January 11, 2027, is still expected to make tough budget decisions in light of the fiscal challenges. Governor Ferguson released a statement on the same day, indicating that the state is still facing short-term budget challenges. As a reminder, the Washington State Office of Financial Management issued budget directions in June directing state agencies to prepare for budget cuts.
In contrast, the September forecast shows improvement after fiscal year 2028. This is largely due to the inclusion of revenue from the “Millionaire’s tax”, which passed last legislative session and is scheduled to go into effect on January 1, 2028.
Questions?
For questions about revenue forecasts or state advocacy, please contact Morgan Hickel at mhickel@uw.edu and Kevin Chang at kchang28@uw.edu.