Washington State’s economy is experiencing a slight slowdown, with consumer spending remaining steady but the housing market not as robust as last year. The latest revenue forecast, announced on Monday, estimates state tax collections to hit $66.9 billion for the current two-year budget cycle, up $191 million from the previous forecast in September. This increase brings the total revenue growth to about $1.2 billion since April, providing Governor Jay Inslee and the Legislature additional funds to allocate in the upcoming 2024 session.
Republican Senator Lynda Wilson, a key figure in the Senate Ways and Means Committee, argued against new taxes, citing sufficient government revenue to maintain current services and programs. Governor Inslee is expected to present his supplemental budget in December, while lawmakers will develop their own version after reconvening in January. Both parties will then work to resolve differences before the session’s end in March.
Steve Lerch, the chief economist, noted that while personal income and retail spending have increased, the pace of growth is slower compared to the previous fiscal years. He highlighted a $269 million increase in consumer spending compared to September’s forecasts and a slight rise in employment and personal income levels. However, revenues from real estate transactions have declined, and fewer housing permits are expected in the coming years.
Lerch, who is retiring after nearly 12 years, emphasized the trend of moderate growth in the future. It’s important to note that these revenue forecasts, issued quarterly, do not account for funds generated from the state’s new cap-and-invest program, which has raised approximately $1.6 billion to date.