The Washington State Economic and Revenue Forecast Council recently released its September
Economic and Revenue Forecast. The state’s key revenue sources (such as real estate excise tax collections) were roughly 2.5% higher than projected in the June forecast for the 2021-23 biennium. However, the preliminary total of general fund
revenue collections for the 2019-21 biennium were $45 million lower than projected in June, partly due to shortfalls in May activity and a higher-than-expected amount of May taxes arriving after the final fiscal year tabulation.
This being the case, the late taxes added revenues for the current biennium: total projected collections for the 2021-23 biennium increased by $927 million and, for the 2023-25 biennium, increased by $931 million. However, the forecast notes that the
state and national economies are still vulnerable to economic uncertainty caused by an increase in COVID-19 cases and spread of the delta variant.
While the forecast highlights signs of economic recovery, the state’s transportation
revenue forecast remains grim. Final collections for the 2019-21 biennium finished at $6.12 billion, a decrease of more than 4.6% biennium to biennium. However, the current 2021-23 biennium is anticipated to exceed the June forecast by roughly $11.5
million (0.2%) due to the Washington State Transportation Commission adopting higher toll rates and ferry fares. Overall, the 10-year forecast horizon projects revenue collections 0.5% higher than indicated in the June forecast.
While both forecasts indicate higher revenue collections than anticipated by June forecasts, the spread of the delta variant causes uncertainty in the state’s economic recovery. Because many businesses have delayed their return to the office and
potential economic restrictions to slow the spread of the new variant, transportation revenue collections will likely not reflect the recovery that the capital and operating funds are experiencing.
Be sure to check out our upcoming Legislative Bulletin for a deeper dive into the two forecasts!