Nov. 25—Updated revenue numbers give Washington Gov. Jay Inslee a little more money to work with as he outlines his spending plans ahead of the 2023 legislative session.
The Washington State Economic and Revenue Forecast Council recently bumped the fiscal 2021-23 forecast up to $63.9 billion, an increase of $762 million, or about 1.7%, compared to what was expected just two months ago.
The 2023-25 forecast increased by $681 million, or about 1.5%, to $66.2 billion.
Inslee will use those numbers to prepare his revised 2021-23 budget and new 2023-25 budget recommendations, which will be released in December. Those proposals serve as a reference point for lawmakers as they craft their own spending plans.
In a recent report to the council, Chief Economist Steve Lerch said stronger-than-anticipated tax collections over the past two months prompted the forecast changes.
"While the November economic forecast is similar to September's, the surplus (in actual revenue collections) indicates that the current level of taxable activity is higher than previously estimated," he wrote.
General fund tax collections in October, for example, were 6.7%, or $157 million, higher than anticipated.
State exports, including Boeing jet planes and agricultural products, were up 14% in the third quarter compared to the same period of 2021. Unemployment ticked up to 3.8% in October — slightly higher than September's 3.7% rate, which tied for the lowest unemployment figure for the state in almost 50 years.
Nationally, the Gross Domestic Product grew by an annual rate of 2.6% during the third quarter, after dipping slightly during the first and second quarter.
Lerch noted that more than 576,000 jobs have been added across the United States just since September. That includes about 14,600 in Washington, which is about 8,000 more than was forecast in September.
However, the Federal Reserve's efforts to bring down inflation by increasing interest rates has prompted a slowdown in the housing sector.
New home construction was down 8.8% in October nationwide, compared to a year ago. And in Washington, residential building permits have dropped by 26% over the course of the year, from 60,500 during the first quarter to 44,500 during the third quarter.
Home sales have also decreased, leading to a $228 million reduction in the 2023-25 biennium in projected real estate excise tax collections.
The entire November revenue report can be found online at erfc.wa.gov/meetings.
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