Washington’s economy is churning a little slower as consumers keep spending but homes aren’t selling at the pace they were a year ago.
A new revenue forecast released Monday projects state tax collections will reach $66.9 billion for the two-year budget cycle that began July 1, an increase of $191 million from what chief economist Steve Lerch predicted in September.
Collections are now up roughly $1.2 billion since lawmakers adopted the budget in April, a sum that Gov. Jay Inslee and the Legislature will consider how to spend in a supplemental budget in the 2024 session.
Sen. Lynda Wilson, the lead Republican on the Senate Ways and Means Committee, said Monday that given the forecast, “there is absolutely no justification for raising even more money through new taxes.”
“There’s no budget deficit on the horizon. It was confirmed today that the government has more than enough revenue to maintain services and programs,” said Wilson, R-Vancouver, in a statement.
Inslee will release his proposed supplemental budget in mid-December. Lawmakers, who return Jan. 8, will craft their own supplemental spending plan and the parties will need to iron out wrinkles before the 60-day session is scheduled to end in March.
Lerch told the Economic and Revenue Forecast Council on Monday that personal income and retail spending are up but there are ongoing signs of slower growth, with tax collections rising at a rate far below the double-digit increases recorded in the 2021 and 2022 fiscal years.
Consumer spending – measured through business and sales and use tax collections – generated $269 million more than forecast in September, Lerch said. And employment and personal income levels are slightly higher than projected two months ago, he said.
But other revenue sources, including the real estate excise tax generated from property transactions, were down. And Lerch’s analysis projects fewer housing permits will be issued in each of the next four years than was assumed in his September forecast.
“We are looking at pretty slow growth looking forward,” Lerch said.
This marked Lerch’s final forecast before retiring after nearly 12 years in the post.
Revenue forecasts, which are released quarterly, do not include money raised from the auction of carbon allowances under the state’s new cap-and-invest program, which has so far raised close to $1.6 billion.
by Jerry Cornfield, Washington State Standard
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