Early estimates anticipate large budget shortfall in Washington
Posted by Ben Shuey on May 8, 2020
While official projections will not be released until June, early indicators from Washington State’s Chief Economist Dr. Steven Lerch, puts the upcoming budget shortfall in the billions of dollars for the current and next two-year budget cycle.
The Legislature budgets on two-year cycles (biennium) to pay for daily costs of government like public schools, health care, public lands, state law enforcement, mental health care, and much more, which currently equates to $53 billion in 2019-21.
The preliminary numbers estimate a $3.8 billion shortfall for the remainder of the current budget that runs through June 2021, giving lawmakers a short amount of time to address it. The same early and unofficial forecast anticipates a $3.3 billion shortfall in the 2021-23 state budget.
It’s important to note that the Legislature does have reserves both through unspent dollars as well as a constitutionally protected emergency fund that currently contains around $2 billion.
While it’s too early to say exactly what legislators will do it’s likely to involve a mix of spending cuts, tax increases, and other short-term measures to keep the state budget on track. Unlike the federal government, the state must have a balanced budget and cannot print money.
While the challenge is not unprecedented given the budget challenges legislators navigated following the 2008 recession, it’s a great reminder that credit unions must continue sharing the incredible work you’re doing to serve the needs of your members at a time when lawmakers will review all available revenue, which would include the tax treatment that is part of the credit union structure.
If you have any questions or would like assistance with contacting your local legislators please do not hesitate to contact me at [email protected].
Posted in Advocacy on the Move.