Two data sets inform the state budget process. One is the economic and revenue forecast: what will the economy do and how much tax revenue will it create. This tells legislators how much they have to spend. The second, the caseload forecast, estimates how much the demand for public services will grow. This includes K-12 education, prison populations, Medicaid, and more. This tells budget writers what they must spend money on.
Legislators have been developing the biennial budget since the legislative session began about 10 weeks ago. But they wont finalize their proposals until the forecastthe last, best guess at what sort of economy were moving into. The governor released her biennial budget proposal last December, which shes required to do by law. The state House and state Senate will release their budget reduction plans soon after the revenue forecast on March 17.
Last week, legislators got some good news from the state Caseload Forecast Council (www.cfc.wa.gov). The council estimated required spending would fall by about $290 million through the next two-year budget period (July 1, 2011 through June 2013).
On Friday the state Economic and Revenue Forecast Council (www.erfc.wa.gov) will issue official projections for how much revenue the state will take in through the next biennium. The forecast lets lawmakers know how much money they have to spend for everything from Central Washington University to fish hatcheries.
The optimistic forecast is for the deficit to deepen by $500 million for the next biennium. The pessimists say it could be another $2 billionon top of the $4.6 billion gap legislators are already trying to close. Senate Majority Leader Lisa Brown said that if the forecast is consistent with the worst-case scenario, lawmakers may place tax loopholes on the ballot for taxpayers to consider.
The March revenue forecast, which reports tax revenue collected over the past 30 days is out now and shows collections down $39.9 million from what economists projected revenue would be.