Rep. Terry Nealey comments on November state revenue forecast and budget outlook

The Washington State Economic and Revenue Forecast Council released its state revenue forecast today and took action to make changes to the state’s budget outlook based upon estimated K-12 education funding costs.

According to Chief Economist and Executive Director Steve Lerch, the General Fund-State (GF-S) revenue forecast has been increased by $215 million for the 2015-17 budget cycle and by $137 million for the 2017-19 budget cycle.

Rep. Terry Nealey, R-Dayton, serves as the House Republican representative on the council and ranking member on the House Finance Committee. He issued the following statement on today’s state revenue forecast:

“I’m pleased to see this forecast is up from September, ever so slightly. Every additional dollar from this forecast will help budget writers as the Legislature focuses on K-12 education funding in the coming 2017 session.

“While personal income and employment have risen primarily in the central Puget Sound region, there are other regions, especially rural areas, that are struggling. The forecast also notes that housing permits are down, and cautions there are still many risks in play in U.S. and global economies that could affect our future state forecasts. That’s why it is important we work this session to improve our business climate and grow Washington’s economy statewide. Doing that will help subsequent forecasts so we can properly address K-12 education and other priorities of government.”

During the meeting, committee members voted to adopt a motion that would show additional K-12 education (state Supreme Court McCleary decision) costs in the state’s six-year budget outlook, including $1.75 billion in 2019 and $3.5 billion in subsequent biennia. A footnote in the outlook would show those costs to be estimates.

Nealey joined Sen. John Braun, R-Centralia, in opposing the motion, arguing it is premature since the Legislature will likely be making policy changes during the 2017 session that could be significantly different than Forecast Council estimates.

From a legal perspective, Nealey, a retired attorney, said the motion also goes against the enacting budget outlook statute (RCW 82.33.060) which reads: “Estimates of ensuing biennium expenditures must exclude policy items including, but not limited to, legislation not yet enacted by the Legislature.”

“There’s not an existing statute, nor did the court put a dollar amount on this, nor is there a policy decision that has been made for us to rely upon to pin a figure down, such as the 3.5 billion dollars. I think it would be an error for us to try to put a number down in the outlook or in a footnote,” Nealey told the committee.

“It is speculation at this point of what the Legislature will do to address McCleary. The Joint Task Force on Education Funding, which the Legislature is relying on for information to make future decisions, is working with significantly different cost estimates than the Forecast Council. So I believe it is a problem to build the Forecast Council’s cost estimates into a six-year outlook until we know the actions of the Legislature in the coming session,” added Nealey.

The council voted to approve the measure, 5-2.

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