Washington state's long-term revenue forecast has weakened yet again, amplifying pressure on lawmakers as they prepare to navigate a tight budget cycle. The latest revenue forecast released Tuesday now shows state revenue through 2029 is $66 million lower than estimated in last quarter's projections.
The November outlook is the final one for the year, and will guide lawmakers as they prepare for a supplemental budget moving into the 2026 legislative session after passing a $78 billion 2025-27 budget and a $9 billion revenue package in May.
The downward revision, even a relatively modest hit like $66 million, creates headwinds for Gov. Bob Ferguson and the Legislature, adding uncertainty around funding for state priorities and raises pressure to find additional savings or consider new revenue sources.
The decline comes amid fewer housing permits, lower employment and slowed personal income growth, according to Dave Reich, executive director and chief economist for the Washington State Economic and Revenue Forecast Council.
Reich said “stronger recent actuals and other factors” mean there will be a slightly higher revenue forecast for the current biennium. Since the September forecast, revenues are up by about $105 million for 2025-27 and projected collections are $74.5 billion. Since the budget was enacted, collections for the current two-year budget are projected to be about $390 million lower than what was anticipated.
For the 2027-29 biennium, however, revenue projections were $185 million lower than what they were estimated in September’s forecast, with total revenue collections projected at $79.4 billion.
Senate lead budget writer Sen. June Robinson, D-Everett, told colleagues recently not to bother asking for any money for new spending in the upcoming session, as there isn’t “money to pay for what is needed, let alone new spending,” the Washington State Standard reported.
In a statement, budget lead for Senate Republicans, Sen. Chris Gildon, R-Puyallup, said the “self-inflicted” budget woes will fall on Ferguson.
“Although this forecast doesn’t make the anticipated shortfall a whole lot deeper, there is no denying Olympia would be in a very different situation had the new state budget simply stayed within the available revenue,” said Gildon, pointing to a budget Senate Republicans had proposed last session without any new taxes.
The latest outlook is “not as bad as we feared it might be,” said Ferguson in a statement, but it also doesn’t change the “scale of the problem.” He said he will be proposing a balance budget that preserves core services but makes investments in important areas.
“We’re still seeing rising caseloads and higher costs to maintain services at current levels and are responding to those as we help develop Governor Ferguson’s supplemental budget proposal,” K.D. Chapman-See, director of the office of financial management, said in a statement.
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