Wednesday marked the first time in two years that a state revenue forecast decreased for a current budget cycle, according to the state Office of Financial Management.
OLYMPIA — Wednesday marked the first time in two years that a state revenue forecast decreased for a current budget cycle, according to the state Office of Financial Management (OFM).
The state is expected to collect $78 million less in tax revenue for the 2015-17 budget cycle, according to OFM. At the same time, lower state spending on welfare, people living in nursing homes and medical-assistance costs is projected to cut spending by $62 million.
For practical purposes, then, the shortfall revealed at a Wednesday meeting of the state Economic and Revenue Forecast Council is $16 million.
It’s practically pocket change for a 2015-17 state budget that spends $38.2 billion.
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But the numbers come as elected officials must find a way to pay in a supplemental budget for last year’s record-setting wildfires and to bolster the state’s struggling mental-health system.
Gov. Jay Inslee and some Democrats have also called for more spending to address a statewide K-12 teacher shortage.
Wednesday’s forecast also lowered revenue projections for the 2017-19 budget cycle by $436 million, according to OFM.
If those projections hold steady or get worse, it could complicate next year’s legislative session. In addition to writing a 2017-19 budget, lawmakers and Inslee are expected to tackle the remainder of the state Supreme Court’s K-12 education-funding order known as the McCleary decision.
That task involves changing the way local property-tax levies are used to pay for basic education. A bipartisan group of state senators last year estimated that shifting basic-education spending paid for with local tax levies onto the state would cost $3.5 billion every two years.
Chief Democratic budget writer Rep. Hans Dunshee criticized the revenue forecast at Wednesday’s meeting for not taking into account possible McCleary costs.
“The McCleary decision is ignored in this, right?” said Dunshee, a Snohomish lawmaker and member of the council. “It’s not in that forecast.”
He added, “When you pretend … you don’t have to make a payment for your house mortgage, you don’t get real math.”
Sen. Andy Hill, R-Redmond and chief GOP budget writer, brushed off those concerns and said lawmakers still don’t know the ultimate cost for McCleary changes.
Hill, also a member of the council, added that in his experience, talk of funding shortfalls in Olympia is chronic.
“This is, you know, the standard way things work here,” Hill said. “We seem to always have a shortfall.”