State Capitol Building in Olympia, WA. File photo

State Capitol Building in Olympia, WA. File photo

New forecast show state revenues won't be quite as robust as expected

Democratic budget writers say they will be cautious but able to fund their priorities. Senate put out a capital budget Monday.

OLYMPIA — A state revenue forecast released March 20 gives Democratic budget writers in the House and Senate less money to spend than anticipated.

Washington’s economy is expected to generate $65.7 billion for the 2023-25 budget cycle beginning July 1. That is $483 million less than chief economist Steve Lerch projected in November but still $1.6 billion more than is expected to flow into coffers for the current budget.

Democratic budget writers in the Senate and House will use the new forecast figure to put the finishing touches on their respective operating budget proposals. The Senate plan was due out March 23 with the House plan coming early next week.

“This news makes us cautious but doesn’t really change our game plan,” said Sen. Christine Rolfes, D-Bainbridge Island, who as chair of the Senate Ways and Means Committee is the chamber’s lead budget writer. “(We’ve) spent the last few days readjusting our budget to reflect this news. I think we’re in OK shape.”

With ample sums available for day-to-day operations and reserves, Republicans said March 20 it is no time for higher taxes or spendy new initiatives.

“We’re still in a sound budget position. I think it is clear that we don’t need to raise new taxes,” said Sen. Lynda Wilson, R-Vancouver, the ranking Republican on the Senate budget committee. “It would be a very good idea to take a more cautious approach in the next budget.”

Lerch, in his presentation to the Economic and Revenue Forecast Council, attributed the lower revenue projection to a decline in residential construction, slower growth in personal income and continuing high inflation. Real estate excise tax collections alone are 42% below February 2022 levels, he said.

In addition, recent bank failures and another likely hike in the federal interest rates are contributing factors, though the extent of which is still uncertain.

The forecast does not include a big sum of money raised from the auction of carbon allowances under the state’s new cap-and-trade program. The first sale earlier this month netted roughly $300 million.

Gov. Jay Inslee, in his proposed budget released in December, assumed auctions will generate $1.7 billion for use in the state’s next operating, transportation and capital budgets.

Meanwhile, Senate Democrats released their capital budget proposal March 20. It lays out $7.9 billion in spending in the next two years of which $4.7 billion is covered under the state bonding cap. The remaining money are federal funds, special accounts not tied to the bonding limit and a $319 million share of the cap-and-trade auction proceeds under the Climate Commitment Act.

One of the big ticket items is $625 million for affordable housing of which $400 million is earmarked for grants and loans through the Housing Trust Fund. There’s also $650 million to the Department of Social and Health Services for construction a new 350-bed forensic hospital at Western State Hospital.

Plenty of local projects are in line for financial help too.

Compass Health, for example, would receive $18.7 million towards its Broadway Campus Redevelopment. There’s nearly $1.4 million for renovating the Edmonds Boys and Girls Club, $675,000 for the Lake Stevens food bank building and $7.4 million for use by the city of Everett in building a new ballpark for the AquaSox.

The Senate Ways and Means Committee is expected to approve the proposal March 22. The Senate could vote on the budget bill as soon as March 24.

Talk to us

Please share your story tips by emailing

To share your opinion for publication, submit a letter through our website Include your name, address and daytime phone number. (We’ll only publish your name and hometown.) Please keep letters to 300 words or less.

More in News

Valley SWAT takes Kent woman, 23, into custody after shooting

Woman barricaded herself in home after reportedly shooting, injuring another woman

Kent School District labor groups want resignations of leaders

Call for Superintendent Israel Vela and Board President Meghin Margel to quit

Kent School District announces employees of the year for 2023-2024

Top teacher, principal, bus driver, coach, paraeducator, custodian and more

Medical examiner identifies second victim in fiery Kent car crash

Troy Thorp, 61, died in May 11 single-vehicle crash along South 272nd Street on West Hill

Kent man, 52, receives reduced sentence in Seattle fatal shooting

Pleads guilty to lesser charge of manslaughter after video of 2020 shooting indicates self-defense

Kent Police use drone, K-9 unit to capture assault suspect

Man had fled after fight with security guard at apartment complex along SE Kent-Kangley Road

Jail bars. File photo
Renton man convicted in 2018 Des Moines homicide

Jurors found 28-year-old Yourhighness Jeramiah Bolar of Renton guilty of two felony charges.

One of two victims identified in fiery Kent crash

Kristen Anne Meyers, 53, died in May 11 crash on West Hill, according to medical examiner

City-owned ShoWare Center in Kent loses $742,675 in 2023

Losses lower than projected but expenses continue to exceed revenue at 6,200-seat arena

Kent firefighters extinguish two fires on the same morning | Photos

Friday, May 17 at apartment leasing office in the Valley and at a vacant East Hill house

Courtesy Photo, City of Kent
City of Kent population drops by 1,051 in 2023 compared to 2022

Decline similar to many cities of 50,000 or more across the nation, according to U.S. Census Bureau

Kent Police Blotter: April 25 to May 8

Incidents include burglaries, robberies, shootings