OLYMPIA — Improved tax collections are expected to add roughly $1 billion to Washington’s coffers through 2023, easing pressure on lawmakers tasked with balancing a looming state budget shortfall and charting a recovery to the COVID-19 pandemic.

Forecasters Wednesday announced the state was projected to take in an additional $634 million for the current two-year budget cycle, and $328 million more than projected for the coming 2021-23 budget cycle.

The rebound was fueled in part by higher estimates in collections on taxes of property, as well as another tax on sales of real estate. Meanwhile, sales tax collections have been higher than expected.

The brighter economic picture further shrinks a sizable budget shortfall as tax collections cratered early on in the pandemic. Forecasters in June projected the deficit through 2023 would be $8.8 billion. By September, they’d cut that projection to $4.2 billion.

The sunnier projections help as lawmakers begin writing the state’s next two-year operating budget, which funds schools, parks, prisons, mental-health, foster-care and other services.

“Obviously, a billion dollars means a lot,” said House Majority Leader Pat Sullivan, D-Covington. “It means the economy’s hanging on and it puts us in a better situation for the next budget.”


But, he added, “We still have problems.”

And many questions remain. Wednesday’s update from the state Economic and Revenue Forecast Council yet again highlighted a dizzying host of uncertainties that Washington faces amid the pandemic.

Congress has talked since spring about more federal relief for businesses and workers hit hard by the pandemic — but not agreed on any action.

The Boeing 737 MAX has been recertified for flight — but airlines are largely grounded amid the pandemic.

And Washington is moving into new territory with the virus, as cases and hospitalizations rise sharply, breaking records. In response, Gov. Jay Inslee this week imposed new restrictions on retail businesses and social gatherings. Inslee at the same time announced $50 million in assistance for businesses impacted by the restrictions.

Republicans have for months fumed that Washington’s Democratic leadership hasn’t called a special legislative session to address any issues related to the virus.

They rekindled those calls this week, calling for a session to help businesses and workers hurt by the pandemic. Rep. Drew MacEwen, R-Union, is drafting several ideas into legislation to help businesses and workers.


They include a temporary suspension of some Business & Occupation taxes, creating a tax credit for businesses assessed for those taxes, and delaying payments for permits for liquor licenses, he said.

“Everything comes down to cash flow,” said MacEwen, who is a partner in two restaurants, one in Shelton, Mason County, and another in Port Orchard, Kitsap County.

“The sadder part in all this — and this happened yesterday — you’re laying off dozens of employees,” he said.

Also Wednesday, the Office of Financial Management submitted its plan to the Legislature for the $50 million in relief announced by Inslee.

The dollars comes from the federal virus relief package approved by Congress this spring. State law gives the Legislature 10 days to give feedback, though lawmakers’ approval isn’t necessary.

The $50 million will be split between grants and loans and administered by the state Department of Commerce.


Of that, $20 million “will be provided for expenses, including (but not limited) to rent, mortgage and utility assistance, to help prevent permanent closure of businesses,” according to a summary of the plan. “Commerce will prioritize businesses owned by black, indigenous, and people of color.”

“We’re focusing on the businesses hardest hit by the latest restrictions (e.g., full service restaurants or fitness centers), and others that have had long-term cumulative impacts,” Inslee spokesperson Tara Lee wrote in an email. The hope is to have that money available for applications in the coming week, she added.

The remaining $30 million will be distributed as loans. Lee described that as “a mid- to long-term recovery tool and the size of it will ultimately depend on how much funding we leverage from private investors and banks.”

“Based on experiences in states like CA and NY we believe we can roll out a loan program with about $100M available,” wrote Lee, with the goal of getting that going by end of winter.