OLYMPIA, WA (MyBellinghamNow.com) – Washington’s budget outlook may be improving, but state officials say challenges remain.

A new state revenue forecast projects nearly $3 billion more revenue through 2031 than expected in June, even though collections are expected to soften in the near term.

That follows the latest state economic report, which found major General Fund revenue collections were $68.2 million, or 2.7%, above forecast during the Aug. 11 through Sept. 10 collection period.

Cumulative collections were nearly $199 million above forecast.

The economic report also shows Washington added nearly 15,000 jobs compared to a year ago, although the state lost 900 jobs from July to August. The unemployment rate edged down to 4.9% in August.

Despite the improved revenue outlook, budget officials say Washington still faces a projected deficit in 2028 and difficult decisions in the next budget cycle. Gov. Bob Ferguson says additional forecasts later this fall should provide a clearer picture ahead of his proposed budget in December.