Washington State Biennial Budget Process

Overview of the Biennial Budget Process

Washington State operates on a biennial budget system, meaning it creates a two-year state budget that covers operating expenses from July 1 of odd-numbered years through June 30 of the next odd-numbered year. This comprehensive planning process involves multiple agencies, the Governor's Office, and the state legislature working together to allocate funds for state programs, services, and infrastructure.

The biennial budget process ensures fiscal responsibility by requiring state officials to look beyond immediate needs and consider longer-term financial implications. It also allows for more stable funding of programs that require ongoing support, as agencies can plan for a two-year period with less uncertainty about funding levels.

In addition to the main operating budget, Washington also develops capital budgets for infrastructure projects and transportation budgets for highways and public transit improvements. While our primary focus here is the operating budget, elements of the process apply to all budget types.

Biennial Budget Timeline

Creating Washington's biennial budget follows a predictable cycle that spans nearly two years, with specific milestones along the way. Understanding this timeline helps clarify how the budget evolves from concept to law.

This timeline represents the "ideal" budget process, but in reality, negotiations sometimes extend beyond regular session deadlines, requiring special sessions to complete budget work. Economic conditions, changing federal funding, policy debates, and unexpected events can all impact the timeline.

Key Participants in the Budget Process

Multiple state entities and officials play crucial roles in developing, reviewing, and implementing Washington's biennial budget. Understanding who does what provides insight into how the final budget comes together.

Budget Preparation Phase

The budget process begins more than a year before a new biennium starts, with state agencies assessing their needs and preparing budget requests. This preparation phase is critical to ensure that funding aligns with state priorities and program requirements.

Agency Budget Requests

Each state agency develops a budget request that typically includes:

• Base budget: Funding to continue current services at existing levels
• Policy changes: Adjustments required by law or new initiatives
• Capital projects: Building construction, renovations, or major equipment
• Performance measures: Expected outcomes and efficiency metrics

Agencies must justify their requests with detailed analysis of current program effectiveness, alternative options, and strategic alignment with state priorities. OFM reviews these requests, asks clarifying questions, and may request modifications before consolidating them into recommendations for the Governor.

Revenue Forecasting

Accurate revenue forecasting is essential to determining how much money the state can spend. The Economic and Revenue Forecast Council meets regularly to review economic indicators and provide official revenue estimates. These projections consider:

• National and state economic conditions
• Employment trends and income growth
• Tax collection patterns and changes in tax law
• Impact of policy decisions on revenue

Strategic Planning

Beyond specific program requests, budget preparation involves strategic thinking about state priorities. The Governor's Office often identifies key initiatives or priorities to emphasize in the budget, such as:

• Education funding and reforms
• Environmental protection and climate initiatives
• Health care access and affordability
• Economic development and job creation
• Housing and homelessness solutions

These priorities shape decisions about where to direct new spending or where to make reductions, creating a policy framework that guides budget development.

Legislative Review and Approval

Once the Governor submits the proposed budget to the legislature, the focus shifts to the Capitol in Olympia. During the legislative session, budget writers in the House and Senate thoroughly review, revise, and ultimately pass the biennial budget.

Committee Process

The budget journey through the legislature begins in the House and Senate Appropriations Committees. These committees:

• Hold public hearings on the Governor's proposal
• Solicit input from agencies, stakeholders, and the public
• Develop their own budget versions based on policy priorities
• Address fiscal challenges with new solutions

The committees may adjust funding levels, add policy provisions, and propose alternative approaches to meet state needs. Each chamber passes its own version of the budget, creating House and Senate versions that must eventually be reconciled.

Negotiations and Compromise

Differences between House and Senate budget versions are resolved through negotiations between legislative leaders and the Governor's Office. Key budget leaders from both chambers typically meet to:

• Identify areas of agreement
• Discuss compromises on contentious items
• Balance priorities across different issue areas
• Ensure overall fiscal responsibility

Final Approval

Once a final budget agreement is reached, both chambers must pass identical budget bills for them to become law. The Governor must then sign the budget bills, though they may exercise line-item veto power to remove specific appropriations or policy provisions while approving the rest of the budget.

The final budget package typically includes:

• The omnibus operating appropriations act
• Technical corrections and implementation bills
• Policy bills with fiscal impacts
• Sometimes supplemental budget bills adjusting the current biennium

Implementation and Monitoring

After the budget is enacted, state agencies shift to implementationtranslating legislative directives into actual programs and services. This phase involves careful planning, execution, and ongoing monitoring to ensure that budgeted funds achieve intended outcomes.

Agency Implementation

Each state agency develops an implementation plan that typically includes:

• Detailed allocation of appropriations to programs and activities
• Hiring or staff reassignment to support new initiatives
• Procurement of goods, services, or capital projects
• Policy and process changes to implement legislative direction

Agencies work with OFM to understand any requirements or restrictions in the budget bills, ensure compliance with state policies, and establish procedures for tracking expenditures and outcomes.

Performance Monitoring

The budget includes numerous performance measures that help assess whether programs are achieving their goals. Agencies regularly report on these metrics, which may include:

• Output measures: Quantity of services provided
• Outcome measures: Impact on conditions or behaviors
• Efficiency measures: Cost per unit of service
• Quality measures: User satisfaction or accuracy

Fiscal Management

Throughout the biennium, agencies manage their finances according to state law and budget provisions. This includes:

• Tracking expenditures against appropriations
• Reallocating funds within authorized limits
• Requesting budget changes if needed
• Preparing financial statements and reports

OFM monitors agency activities and may intervene if financial concerns arise, and the legislature may hold oversight hearings to review implementation progress.

Public Engagement in the Budget Process

Washington's budget process provides multiple opportunities for public input, recognizing that state spending decisions affect communities throughout the state. These engagement opportunities help ensure that taxpayer priorities and concerns influence budget decisions.

Opportunities for Input

Residents can participate in the budget process through:

• Testifying at legislative budget hearings (in person or remotely)
• Contacting legislators and the Governor's Office with budget priorities
• Participating in work groups or advisory committees
• Submitting written comments on specific budget proposals
• Engaging with advocacy organizations focused on budget issues

Budget Transparency

Washington maintains transparency in budgeting through:

• Publicly available budget documents and proposals
• Live webcasts of legislative proceedings
• Accessible fiscal and program data
• Clear reporting of budget outcomes and expenditures

Resources for Citizens

Several resources are available for citizens interested in following or participating in the budget process:

• OFM website: Contains budget proposals, reports, and financial data
• Legislative website: Provides budget bill texts, hearing schedules, and live proceedings
• Economic and Revenue Forecast Council: Quarterly revenue forecasts and analyses
• Washington State Budget & Policy Center: Non-partisan analysis of budget decisions

By engaging with these resources and participating in the process, citizens can help ensure that Washington's biennial budget reflects the diverse needs and priorities of the state's population.