State finds $1.45 billion windfall as legislature looks to pass supplemental budget

OLYMPIA – Money keeps coming in for the state Legislature to allocate in their budget this year.

A new forecast on Wednesday showed the state revenue for the budget cycle ending in 2023 has increased by about $1.45 billion since the last forecast in November. Since lawmakers wrote their budgets last spring, projected revenue has increased by just over $5 billion.

Steve Lerch, executive director of the Economic and Revenue Forecast Council, said it was “a pretty substantial upward revision to the revenue forecast.”

The increase in revenue is due to stronger than expected collections, higher inflation, stronger personal income and retail and real estate sales, Lerch said.

With the additional revenue, the state will have $61.7 billion for the rest of the two-year cycle ending in 2023. For the following two years, the state will have nearly $65.4 billion to spend. And that’s not counting the more than $1 billion still left in federal COVID-19 relief funds that must be allocated by 2024.

House and Senate Democrats will release their proposed budgets in the coming days. Those proposals will have to be consolidated into one final budget that the Legislature must pass by the end of the session on March 10.

Appropriations Committee Chair Rep. Timm Ormsby, D-Spokane, said there are “substantial adjustments” that budget writers will have to make to their proposals in the coming days. He said in a statement he remains “guardedly optimistic” as there is still significant risk for uneven economic recovery post-pandemic.

“This is a larger adjustment to the budget than I think any of us anticipated, fortunately, for the good,” Senate Ways and Means Committee Chair Sen. Christine Rolfes, D-Bainbridge Island, said.

Rolfes also said she remains cautious about the revenue, especially as inflation and supply chain issues remain.

Republicans have pushed for some sort of tax relief since the beginning of the session, but Democrats, including Gov. Jay Inslee, have been less willing to include that in their budget proposals.

“I appreciate that the numbers are very good, and I would still advocate for some sort of tax reduction for our people,” Sen. Lynda Wilson, R-Vancouver, said.

Democrats have said any additional money should be invested into communities and programs that need it. The more than $1 billion federal money is one-time money and should be used on activities related to the COVID-19 pandemic, Rolfes said Wednesday.

“We have more than a billion dollars worth of COVID-19 costs over the last year and going forward,” she said.