WA Budget Leaders Receive Updated Revenue Forecast Ahead of Budget-Focused Session

Lawmakers and other state officials serving on the Washington Economic and Revenue Forecast Council received the latest fiscal projections from the state’s chief economist at their quarterly meeting on Friday. While they will receive the fourth quarter figures before entering session, this check in point provides more information on the scope and scale of what budgetary issues legislators will face in crafting a new two-year state budget next year.

While the figures have adjusted up and down by tens of millions of dollars for the current budget and next projected time period between 2025-27, the latest numbers are generally considered small changes in the overall context of what will eventually be a $70+ billion state budget.

The current 2023-25 budget period saw the anticipated tax revenue revert down by $49 million, with the 2025-27 time frame projecting an increase of $79 million.

The items identified as the main driving factors included:

  • Lower than anticipated sales tax collection was largely offset by higher than anticipated capital gains, business and occupation, and real estate excise taxes projected to come in.
  • Slowing inflation due to policy cuts and recent fed rate cuts higher than previous projections.
  • Potential risks due to an extended Boeing machinists’ strike.
  • Personal income, employment growth, and housing permits all came in less than projected in June, albeit projections show housing permits should tick up steadily in future years.
  • Car and truck sales increased for the second consecutive month.

Additional questions and layers of complexity could come depending on the results of ballot initiatives that Washington voters will weigh in on during the November general election including the capital gains tax, climate cap and trade program, and long-term care payroll program.

If you’re interested in the raw data or diving into the weeds on Washington state revenue forecasts click here – September 27, 2024 ERFC Revenue Review meeting materials (wa.gov)

Posted in Advocacy on the Move, Washington Advocacy.