Despite positive revenue forecast, Sen. Lynda Wilson wary of financial ‘iceberg’ ahead

The final revenue forecast for 2022 shows an increase of $1.4 billion over state government’s four-year budget outlook – an additional $762 million for the 2021-23 budget cycle

OLYMPIA – Sen. Lynda Wilson, Republican budget leader, says a projected slowing of state revenue growth combined with record government spending means little chance for inflation relief in 2023 and the possibility of a deficit for the next state budget cycle.

The final revenue forecast for 2022 shows an increase of $1.4 billion over state government’s four-year budget outlook – an additional $762 million for the 2021-23 budget cycle, which reaches its midpoint June 30, and $681 million more for the 2023-25 biennium. It was adopted by the state’s Economic and Revenue Forecast Council during a meeting at the Capitol this afternoon.

Wilson, R-Vancouver and a member of the ERFC, offered this assessment:

“Between today’s revenue forecast and the latest caseload forecast, I expect 2023 is going to bring a reality check. While inflation was hitting a 40-year high this year, our Democratic colleagues were increasing state spending at a rate not seen in 30 years. Maintaining all those programs and services will cost even more going forward, and that’s before you factor in a projected 705-million-dollar increase in the caseloads and the end of the windfall of federal pandemic money.

“The economic slowing indicated by the September forecast had some suggesting a budget deficit was on the horizon. Today’s numbers represent a bit of a rebound but aren’t cause for celebration, because we all see the news about layoffs and are continuing to pay high costs for gas, heat, food and housing. Our state could be just one negative forecast away from a collision course with a financial iceberg – and a shortfall would mean painful spending cuts, painful tax increases or both. Let’s not forget all the tax increases that are already looming next year, which will further exacerbate the affordability crisis in our state. Every one of them was approved when our state’s financial picture was brighter than it is now, which tells me the Democrats would not hesitate to raise taxes to head off a deficit.

“Unfortunately, it seems clear now that the window for offering meaningful tax relief is closing. Republicans recognize how families are struggling financially, yet Democrats rejected every one of our proposals to let Washingtonians keep more of their own money. Just before the general election the governor’s office and the Senate majority leader dropped hints about broad-based tax relief in 2023, but I suspect people will see those for what they are. In light of today’s forecast, delivering tax relief will likely require them to say ‘no’ to the state agencies that have grown used to the big spending of the past six years. It’s also a heavier lift now that the governor committed to the richest labor contract ever for state employees.

“With the 2023 session around the corner, and the governor’s budget proposal being presented to the Legislature next month, we’ll see soon enough whether the Democrats are on the side of families who need help affording the basics – or a government that has been well fed for many years.” 

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