Two state government reports issued Wednesday contained good and bad news for state budget writersalready facing a budget shortfall of $1 billion to $3 billion.
State budget director David Schumacher told the Caseload Forecast Council meeting in Olympia that an expected increase in K-12 school enrollments alone may add $380 million to the state’s costs through June 2017, which is the end of the next two-year budget cycle.
On the other hand, a revenue-collections report for the past month showed state tax receipts grew by almost $54 million above the most recent forecast.
The new numbers came out before next week’s quarterly revenue forecast that will shape Gov. Jay Inslee’s budget proposal in December and set the stage for the 2015 legislative session.
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Schumacher said in an interview that both reports are a reflection of a growing state economy, which is also causing people to move into the state — in some cases with school-age children.
“Things are getting slowly better. But at the same time, one of the ... biggest budget drivers, K-12, grows right along with it,” Schumacher said.
Schumacher’s staffers at the Office of Financial Management are expected to calculate more exact figures for the overall report later this week, but he said the net effect of the caseloads report is an increase in the other programs’ costs, too.
The caseloads forecast includes predictions of the numbers of people expected to be in schools and colleges, or receiving state services such as welfare or foster care services.
Schumacher said K-12 school enrollment, which is just over 1 million children, may grow by about 30,000 over the next 32 months. The forecast showed an increase of about 12,000 enrollments over the previous forecast in September.
OFM is predicting a shortfall could be as much as $3 billion, despite a potential $2.8 billion increase in revenue in the next biennium above what was forecast for the current biennium that ends in June 2015.
The shortfall includes rising costs for pensions, health care programs and debt service as well as compensation adjustments for K-12 teachers, higher education staffers and state-agency employees.
Schumacher said voter approval of Initiative 1351’s class-size reductions in K-12 schools could add another $2 billion to the budget challenge.