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A Guide to the
Office of Washington State
Financial Management
STATE OF WASHINGTON Budget Process
July 2019 Biennial budget cycle
This guide contains information on: Washington enacts budgets on a two-
Biennial budget cycle year cycle, beginning July 1 of each odd-
Roles and responsibilities in the numbered year. The budget approved for
budget process –21 biennium remains in effect
Budget development approach the 2019
Budget and accounting structure from July 1, 2019, through June 30, 2021.
Source of state revenue By law, the Governor must propose a
biennial budget in December, the month
Size and distribution of the state before the Legislature convenes in regular
budget session. The biennial budget enacted by
General Fund-State operating budget the Legislature can be modified in any
State staffing levels legislative session through changes to the
Budget drivers original appropriations. Since the inception
State spending limit of annual legislative sessions in 1979, it has
Debt limit become common for the Legislature to
Budget Stabilization Account enact annual revisions to the state’s biennial
Glossary of budget-related terms budget. These revisions are referred to as
supplemental budgets.
Ongoing June 2020 September 2020 Fall 2020 December 2020
Agency OFM issues Agencies OFM review Governor
strategic budget submit and proposes
planning instructions budget Governor’s budget to
requests decisions Legislature
January 2021 April/May 2021 May/June 2021 July 1, 2021 Ongoing
Legislature Legislature Governor Biennial Performance
convenes passes signs budget takes measure
2nd Monday budget budget effect tracking
of January
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Roles and responsibilities in the budget process
State agencies are responsible for developing in the Senate and 98 members in the House
budget estimates and submitting budget of Representatives. Specific fiscal committees
proposals to the Governor. Once the budget is have primary responsibility for preparation
enacted by the Legislature and approved by the of the legislative budget. These include
Governor, agencies implement approved policies the Appropriations, Capital Budget and
and programs within the budgetary limits Transportation committees in the House;
imposed by legislation. Under Washington’s and the Ways & Means and Transportation
budget and accounting statutes, individual committees in the Senate.
agency directors are accountable for carrying out
the legal intent of appropriations. The House and Senate employ staff analysts
to review and evaluate the state budget and
The Governor recommends a budget to the to prepare appropriation bills. As with other
Legislature consistent with executive policy legislation, if the two houses cannot agree on a
priorities. Appropriation bills, like other budget or revenue proposal to implement the
legislation, are subject to gubernatorial veto budget, a conference committee of legislators
authority and may be rejected in part or in their may be convened to reconcile the differences.
entirety within a defined number of days after
legislative passage. After a budget is enacted, the Beginning with the 2013–15 biennium, the
Governor’s general administrative duties include Legislature must enact a budget that leaves a
monitoring agency expenditures and helping to positive ending fund balance in the General
implement legislative policy directives. Fund-State (GF-S) and related funds.
The Office of Financial Management (OFM) The Economic and Revenue Forecast Council
coordinates the submittal of agency budget (ERFC) is composed of representatives from
requests and prepares the Governor’s budget both the legislative and executive branches. Each
recommendation to the Legislature. Budget staff fiscal quarter, the council adopts an official
from OFM work closely with state agencies forecast of GF-S revenues for the current and
to explain and justify planned expenditures. (at some point) the ensuing biennia. These
Analysts evaluate all budget requests for forecasts, together with any reserves left over
consistency with executive policy priorities and from previous biennia, determine the financial
to ensure that proposed expenditures match resources available to support estimated
fiscal constraints. OFM is also responsible expenditures.
for maintaining the state’s central accounting Beginning in 2012, the ERFC also became
system and developing certain population and responsible for overseeing preparation of
demographic forecasts. GF-S expenditure outlooks for future biennia.
Through appropriations bills, the Washington With the technical assistance of a State Budget
State Legislature mandates the amount of Outlook Work Group composed of legislative
money each state agency can spend and, in and executive staff, expenditure outlooks
varying degrees of detail, directs agencies are published in November, January (for the
where and how to spend it. Washington’s Governor’s budget proposal) and within 30 days
bicameral Legislature consists of 49 members of enactment of the operating budget.
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The Caseload Forecast Council was created The State Expenditure Limit Committee,
by the 1997 Legislature and began operations composed of legislators and representatives
in the 1997–99 biennium. The council consists of the Governor and Attorney General, was
of two members appointed by the Governor established in 2000 to determine the state
and four appointed by the legislative political General Fund expenditure limit created by
caucuses. The council prepares official caseload Initiative 601.
forecasts for state entitlement programs,
including public schools, long-term care,
medical assistance, foster care, adoption
support, adult and juvenile offender institutions
and others.
Budget development approach
In general, Washington state’s budget process In working with the Governor to develop his
cannot be characterized by any single budget 2019-21 biennial budget, OFM used Results
decision model. Elements of program, Washington goals, outcome measures and action
target and traditional line item budgeting plans — along with agency strategic plans and
associated with objects of expenditure (e.g., performance measures — to prioritize spending
salaries, equipment) are all used, along with a within and across agency budgets. Improving
performance budgeting approach in decision- efficiency and streamlining the operations of
making. state government is an expectation Governor
Inslee has of all agencies.
In 2017, meeting the state’s constitutional duty
to fully fund K-12 education was an enormous
challenge and the top budget priority. Agencies
were directed to limit their requests for new
funding and to focus on the highest priority
services that deliver significant performance
improvements and outcomes for the people of
Washington. While agencies are always expected
to strive to reduce costs and find new ways to
save resources, these efforts will be especially
important over at least the next two biennia.
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Budget and accounting structure
State government is organized among 119 The state’s budget and accounting system
agencies, boards and commissions representing includes more than 730 discrete accounts,
a wide range of services. While many state which operate much like individual bank
agencies report directly to the Governor, others accounts with specific sources of revenue.
are managed by statewide elected officials or The largest single account is the GF-S. State
independent boards appointed by the Governor. collections of retail sales, business, property,
Most agencies receive their expenditure and other taxes are deposited in this account.
authority from legislative appropriations that Expenditures from the GF-S can be made
impose a legal limit on operating and capital for any authorized state activity, subject to
expenditures. Appropriations are authorized for legislative appropriation limits.
a single account, although individual agencies
frequently receive appropriations from more Other accounts are less flexible. Certain
than one account. revenues (for example, the motor vehicle
fuel tax or hunting license fees) are deposited
A few agencies are “nonappropriated,” meaning in accounts that can be spent only for the
that they operate from an account that is legally purpose established in state law. In budget
exempt from appropriation. Expenditures by terms, these are referred to as “dedicated
these agencies are usually monitored through a accounts.”
biennial allotment plan. There is no dollar limit
as long as expenditures remain within available
revenues and are consistent with the statutory
purpose of the agency.
Sources of state revenue
Washington receives most of its revenue from taxes, licenses, permits and fees, and federal grants.
Each individual revenue source is designated by law for deposit in specific accounts to support state
operating or capital expenditures.
Licenses, permits, ees
.4% Sources of State Revenues – All
Governmental Funds
2019–21 Biennium Estimates
Category $$ in millions
Federal grants Taxes $55,047
24.4% Charges/misc. revenues 27,426
Taxes 48.2%
Federal grants 27,834
Charges & Licenses, permits, fees 3,818
miscellaneous Total $114,125
revenues 24.0%
Source: 2019–21 OFM budget database
Office of Financial Management
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