Washington’s next budget has only 2.5% capacity, while projected inflation could hit 9.4% over two years. The state’s June revenue forecast, released Friday, raised projected collections for the current 2025-2027 biennium by about $554 million above what the enacted budget assumed, while lowering projected revenue for 2027-2029 by about $461 million.

Revenue Forecast

The Economic and Revenue Forecast Council lowered projected personal income growth, which will impact revenue. The state is currently spending about $80.2 billion, leaving roughly $2 billion in budget capacity, about 2.5% over the two-year biennium, before spending exceeds expected revenue. This projection also assumes the new income tax remains in place, even though it may ultimately be overturned by the Supreme Court.

Apart from the Great Recession, Washington’s budget has never grown that little. The Council projects Seattle inflation of 4.6% in 2026 alone. If inflation remained at that rate, prices would rise roughly 9.4% over two years, nearly four times the budget’s available 2.5% growth.

Original reporting: Clark County Today (Vancouver WA) — read the source article.