Washington’s revenue forecast drops by $66 million

There are more money problems in Olympia.

Washington economists are now expecting less revenue than they thought through 2029, according to a news release from the Office of Financial Management (OFM).

The state’s forecast council said projections are down about $66 million from September, thanks to fewer housing permits and slower job growth.

However, OFM said it’s a “relatively small adjustment” and is offset by an increase in state payments from the Tobacco Master Settlement Agreement.

Earlier this month, the state received approximately $66 million from the latest settlement with tobacco company Philip Morris, following a multibillion-dollar settlement reached nearly 30 years ago.

Employment growth slows as Washington revenue forecast dips

But in terms of jobs, growth remains sluggish.

“Not forecasting a lot of any employment growth in 2026, and then slow employment growth after that,” Washington State Economic and Revenue Forecast Council Executive Director Dave Reich stated.

In June, state economists predicted a $720 million budget shortfall over the next four years. Reich cited several global and national risks contributing to the economic uncertainty, including tariffs and ongoing conflict in the Middle East. He added that both the national and state economies were slowing down.

Next month, Washington Governor Bob Ferguson is set to release his proposal to balance the budget.

“We’re still seeing rising caseloads and higher costs to maintain services at current levels and are responding to those as we help develop Governor Ferguson’s supplemental budget proposal,” Director of OFM K.D. Chapman-See stated in the release.

The next revenue forecast is required by February 20.

Contributing: Aaron Granillo and Frank Lenzi, KIRO Newsradio; Julia Dallas and Jason Sutich, MyNorthwest