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State lawmaker urges repeal of 4.5% out-year revenue assumption to avoid future budget shortfalls
Summary
Representative Couture told the House Appropriations Committee HB 1411 would remove a fixed 4.5% revenue growth assumption and require out‑year estimates to use the Economic and Revenue Forecast Council forecast, saying the static assumption has contributed to recurring deficits.
Representative Couture urged the House Appropriations Committee to pass House Bill 1411, which would repeal the statutory 4.5% annual revenue growth assumption used for the out‑year budget outlook and instead require the legislature to base those out‑year revenue projections on the Economic and Revenue Forecast Council (ERFC) forecast.
Couture told the committee the 4.5% assumption, adopted in 2012, has been “overly optimistic” in many years and contributed to mid‑cycle deficits, using a mix of factors that he said include spending growth outpacing revenue growth, use of the rainy day fund for new policy, overreliance on COVID federal funds, and overly optimistic revenue estimates. “This 4.5 percent assumption was introduced as part of the state's budget framework in the year 2012,” he said. “Unfortunately, reality has not followed this trajectory.”
The bill would align the out‑biennium revenue assumptions with the ERFC’s regularly updated, data‑driven forecasts. Couture said the change would “increase accuracy and responsiveness” and make budgeting more “responsible, accurate and sustainable.” He pointed to current indicators — slower population growth, higher business failure rates, and a weak construction sector — as reasons the 4.5% rate is no longer realistic.
Couture recommended lawmakers stop routinely assuming the maximum statutory growth factor for the third and fourth years of the four‑year outlook and instead “rely on the revenue forecast from the ERFC.” He warned that continuing the current assumption risks further cuts to services relied on by students, families and vulnerable Washingtonians. He referenced Governor Bob Ferguson’s budget document as noting the legislature’s routine use of the 4.5% factor had exceeded ERFC projections and “materially contributed to our current budget shortfall.”
The committee did not take any formal action on HB 1411 during the work session. The discussion was presented as technical budget policy; Couture framed the proposal as one step in a larger set of reforms lawmakers could take to stabilize the operating budget.
The topic was presented at the start of the meeting as a work session item and concluded before the hearing portions of the agenda began.
