Upcoming Conference | 2019 Re-Wire Policy Conference, Dec 10, 2019 Register

Where the “$2.8 billion surplus” number comes from

As operating budget proposals are rolled out, debated, amended, and voted on, Washington House Democrats and Republicans have seemingly contradicted each other on a fundamental fact: Whether or not there’s a budget surplus.


Rep. Drew Stokesbary, lead budget writer for House Republicans, says there’s a $2.8 billion surplus over the next four years, while Democrats have repeatedly said there’s no extra money to work with this biennium.

Rep. Stokesbary said he gave a presentation to House Republicans on the budget, including the following slide that shows a surplus:

He said the budget outlook from which he pulled the numbers, below, was prepared by nonpartisan staff and is based on current law only — as if the status quo were to be maintained and no new policy passed.

(annotation added by Washington State Wire)

Stokesbary said the resource numbers in his presentation come from the “Total Revenues and Resources” line. And the $2.8 billion surplus total comes from the “Projected Ending Balance” — both are identified above with green squares.

“Our collecting $8.6 billion of new revenue this biennium doesn’t necessarily mean we have $8.6 billion to spend, because some of that’s already been committed,” Stokesbary said. “And I don’t dispute that. But, even after you account for what’s already been committed and then look ahead for the next two years, as well — even after you account for all of that, we still have a very healthy surplus.”

In the yellow is another way to read the same numbers: Current revenue minus appropriations, carryforward level adjustments, and maintenance costs equals a much smaller, $60 million surplus for this biennium, before any policy changes.

So, why use the projected ending fund balance from the next biennium as a benchmark, rather than that calculation? Stokesbary says it has to do with the four-year balanced budget requirement.

“Just given the cost of everything we do around here, it is almost always more difficult to balance things over four years than it is over two years,” Stokesbary said. “So, it makes some consensual sense just to worry about the four-year number and balancing that. Because, if you spend your whole time calculating two-year costs and balancing that, you would almost certainly find yourself out-of-balance over four years, so you’d have to start over.”

Stokesbary concedes that we’re not in a policy vacuum; but, this is what it would look like if the Legislature “somehow got out of here doing nothing.”

Regardless, he said there are other ideas to consider — fund transfers, etc.– for providing up to an extra $2.5 billion in funding without new taxes to fund policy changes.

“I think Republicans have consistently pointed to the growth trajectory of state tax collections as evidence of how well the economy is doing and evidence that there really isn’t the need for more taxes,” Stokesbary said. “And, I think both of those things are true. But even that, I’ll concede, might not tell the whole story. I think the whole story is also looking at, even after you factor in some of these maintenance-level and carryforwards, like from McCleary, and you have a huge ending fund balance — now, I do think that begins the whole story”