South Kitsap Chamber of Commerce Legislative Update

Forecast shows slowdown in economic activity; capital budget released

Revenue projections: The legislative session will be in full budget mode this week, with the Senate capital budget proposal released this morning, the latest revenue forecast released this afternoon, and both

chambers releasing their draft operating budgets in the next few days.

• The state’s latest revenue projections indicate a slowing economy. Tax collections are forecast to come in less than previously expected: $483 million below earlier forecasts for the 2023-2025 budget cycle and $541 million below previous forecasts for the 2025-2027 budget cycle, according to today’s report from the Washington State Economic and Revenue Forecast Council. 

• Budget-writers will still have more money to spend in the next biennium than they did in this one. The state will have $65.7 billion to spend in 2023-25, which is 2.4% more than in the current budget. Looking ahead, in 2025-27 tax revenues are expected to hit $70.3 billion, a 7.1% increase over expected 2023-25 biennial revenue.

• Steve Lerch, executive director of the Economic and Revenue Forecast Council, said on Monday a cooling economy is driving the lower revenue projections. Real estate excise tax collections have come in under forecast, he noted, and rising interest rates have curtailed construction and spending. The red hot job market shows signs of slowing and inflation has decreased, but remains high.

• Hours before, the Senate released a $7.9 billion capital budget proposing to fund housing and mental health, school construction, a new 350-bed forensic hospital at Western State, two new Washington State Patrol crime labs, and more. Click here for a summary of projects.

AWB’s position: With growing concern about the possibility of a recession, this should be a time for fiscal responsibility and building up the state’s rainy day fund, rather than depleting it.

• For more details on the state’s revenue outlook, join us Thursday for a special Lobby Lunch meeting featuring Steve Lerch, the state’s chief economist. You can attend in person or register here for a Zoom link.

Contact Government Affairs Director Emily Shay to learn more and get involved. 

Capital budget calls for historic housing investment; middle housing bill moves forward

Housing investment: The Senate’s capital budget proposal, released this morning, would allocate $625 million for housing, including $400 million for the Housing Trust Fund. That’s more than the entire amount the state put into housing in the three biennia before the pandemic, and would be the most in state history put into the Housing Trust Fund. This funding, combined with a bipartisan middle housing bill that is making progress in the Legislature, would make a real difference in our state’s housing issues. The Washington Research Council has more.

• $67 million for the Housing Finance Commission Land Acquisition Program; $50 million for projects to increase transit-oriented housing; $20 million to connect affordable housing developments to infrastructure; and $5 million for landlord mitigation.

Bipartisan solutions: That comes as a series of housing bills continue to move forward, as Crosscut reports. House Bill 1110 sponsored by Rep. Jessica Bateman, D-Olympia, which would provide for more duplexes, fourplexes and other multi-unit housing in cities with more than 25,000 people, recently passed the House by a 75-21 vote.



• A pair of Republican sponsored bills passed nearly unanimously: HB 1245 would allow homeowners to split lots to build a cottage or additional home, while HB 1293 would streamline the permitting process for building houses in urban growth areas.

Be sure to check out other bills currently on our Bill Watch List.