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. Even with a slight decrease in taxable REET activity in August, the state still collects this revenue source at historically high levels.

Washington employment has increased by over 60,000 jobs, and the state’s real estate transactions remain strong. In fact, the forecast reports that the state’s economy is expected to outperform the national economy in employment and personal income growth—all of which bodes well for economic recovery at the local level.

As a caveat, 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. These impacts are exacerbated by the slow supply chain recovery and growth in labor supply and has caused a higher-than-expected rate of inflation.