The House Ways and Means Committee heard public testimony yesterday on HB 2607: Requiring a six-year budget outlook tied to existing revenues. Regularly publishing a multi-year budget outlook is one of the many recommendations in WPC’s Policy Guide for Washington State.
One of the most recognizable measurements of the state’s fiscal health is the multi-year budget outlooks. These updates, however, are not done on a regular basis. This is why the many bipartisan sponsors of HB 2607 hope to require regular six-year budget outlooks to be published.
According to the bill report for HB 2607:
- Finds that a six-year budget outlook tied to existing revenues would help create sustainable budgets.
- Requires the Office of Financial Management to publish a six-year budget outlook concurrent with release of the Governor’s budget documents.
- Requires legislative fiscal committees to update the outlook prior to voting on an operating budget in committee or on the floor.
- Requires outlooks to use the most recent revenue and caseload forecasts.
- Requires outlooks to estimate the impact of all budget decisions with a delayed effective date or without an identified funding source.
Along with providing policy makers and the public with a snapshot of the state’s fiscal health, the existence of multi-year budget outlook reports are also looked on favorably by national credit rating agencies. Although Fitch and Moody’s recently changed their outlook for the state to negative, Standard and Poor’s maintained a stable rating due in part to the state’s financial management tools. Among the tools S&P highlighted was the multi-year budget outlook report:
“Further guiding budgeting decisions is a rolling, four-year general fund forecast maintained by the governor’s Office of Financial Management. The state uses these forecasts to quantify the timing and scope of potential deficits in the subsequent biennium and, in some cases, to begin to address structural imbalances before the next budget cycle begins.”
To help enhance the six-year budget outlook reporting requirement proposed by HB 2607, I testified yesterday that these reports should also be tied to the state’s quarterly revenue forecasts. This would provide updated information throughout the year on the state’s fiscal outlook and help provide a quarterly status checks on the state’s fiscal health. The six-year budget outlooks could also be posted on the state’s searchable budget website (fiscal.wa.gov) to provide citizens easy access to the updates.
Here is my testimony on HB 2607: (click here for video)
[Reprinted from the Washington Policy Center blog]