From NYBA Lobbyist Jim Hedrick:

November 2023 State Quarterly Economic and Revenue Forecast

Yesterday (11/20) the state quarterly revenue forecast was released. Forecasted state revenue are increased for the current 2023-25 biennium by $191 million and increased by $579 million for the future 2025-27 biennium. Total state revenue is expected to grow 3.3% between the 2021-23 and 2023-2025 biennia and 6.9% between the 2023-25 and 2025-2027 biennia.

Major economic factors driving the revenue forecast are Washington’s personal income is stronger than in the September forecast, total Washington employment is stronger than in September, and inflation is slightly lower. After rising to 3.7% in August and September, inflation dropped to 3.2% in October. Even though inflation continues to trend downward it remains above desired levels. The Federal Reserve is expected to raise the federal funds interest rate to a range of 5.5% to 5.75% in December but decrease rates more slowly than in September forecast.

Washington’s low unemployment rates continue to be a positive economic factor as Washington employment has increased by 5,700 jobs since September and the Washington unemployment rate remains low at 3.8%.

Downsides in the Washington economy are interest rates and the tightening of credit that threaten the commercial real estate market, business investment, and consumer demand.

The next state quarterly revenue forecast will be in mid-February and serve as the baseline for supplemental budget proposals from the House and Senate. The legislature will have until March 8th to pass an agreed to supplemental (2^nd year of the biennium) budget.

Potential Ballot Initiatives to the Legislature

Washington State has not had an initiative on the ballot since 2018, largely due to the COVID making it difficult for signature gathering. Let’s Go Washington, a new conservative political committee funded by hedge fund manager Brian Heywood, is in the process of qualifying six initiatives to the Legislature. The requirement to qualify an initiative to the Legislature is 324,516 valid signatures by December 29, 2023. If certified by the Secretary of State’s Office the initiative(s) would move to the Legislature for consideration during the 2024 Legislative Session. Upon receipt of a qualifying initiative, the 2024 Legislature will have one of three options:

• Adopt the initiative as proposed, allowing it to become law without a vote of the people;
• Not act on the initiative, allowing a vote of the people in the 2024 General Election; or
• Propose an alternative ballot measure dealing with the same subject, sending it and the original for a vote of the people in the 2024 General Election.

Representative and new Washington State Republican Party Chairman Jim Walsh (R-Aberdeen-19LD) is the prime sponsor on all the initiatives. The subject and description of each initiative is as follows:

• Initiative No. 2113 concerns vehicular pursuits by peace officers. This measure would remove certain restrictions on when peace officers may engage in vehicular pursuits. Such pursuits would be allowed when the officer has a reasonable suspicion a person has violated the law, pursuit is necessary to identify or apprehend the person, the person poses a threat to the safety of others, those safety risks are greater than those of the pursuit, and a supervisor authorizes the pursuit.

• Initiative No. 2117 concerns carbon tax credit trading. This measure would prohibit state agencies from imposing any type of carbon tax credit trading, including “cap and trade” or “cap and tax” programs, regardless of whether the resulting increased costs are imposed on fuel recipients or fuel suppliers. It would repeal sections of the 2021 Washington Climate Commitment Act as amended, including repealing the creation and modification of a “cap and invest” program to reduce greenhouse gas emissions by specific entities.

• Initiative No. 2124 concerns state long term care insurance. This measure would amend state law establishing a state long term care insurance program to provide that employees and self-employed people must elect to keep coverage under RCW 50B.04, allow employees to opt-out of coverage under RCW 50B.04 at any time, and repeal a current law governing exemptions for employees who had purchased long term care insurance before November 1, 2021.

• Initiative No. 2109 concerns taxes. This measure would repeal an excise tax imposed on the sale or exchange of certain long-term capital assets by individuals who have annual capital gains of over $250,000.

• Initiative No. 2111 concerns taxes. This measure would prohibit the state, counties, cities, and other local jurisdictions from imposing or collecting income taxes, defined as having the same meaning as “gross income” in the Internal Revenue Code.

• Initiative No. 2081 concerns parental rights relating to their children’s public school education. This measure would allow parents and guardians of public-school children to review instructional materials and inspect student records, including health and disciplinary records, upon request. It would require public schools to provide parents and guardians with certain notifications, including about medical services given and when students are taken off campus; access to calendars and certain policies; and written notice and opportunities to opt students out of comprehensive sexual-health education and answering certain surveys or assignments.