We hope the latest optimistic revenue forecast quells any appetite for new state taxes by the Legislature.
Thanks largely to increasing property tax collections, State Economist Steve Lerch projects a $606 million increase in general fund revenues in the 2019-21 biennium. In his report last week, he also projected a $536 million revenue increase in the 2021-23 biennium, bringing total revenue increases to over $1.1 billion.
There was no mention of a recession or significant slowdown of the state economy. In fact, Lerch noted that Washington State continues to outpace the already-healthy national economy.
With just a few weeks remaining in the 2020 Legislative Session, there’s been no talk to confirm earlier fears of passing either a capital gains tax or income tax. This week, the state House and Senate proposed supplemental budgets including no new taxes or cuts aside from a business and occupation tax hike approved earlier in the session.
Lerch’s forecast, it seems, should rule out any talk of income taxes or hikes in fees on business for at least the next three years if revenues continue to pour in as expected.
Retailers across the state already have plenty on their minds notwithstanding the need to adapt to driving consumer needs while keeping their businesses profitable. They’re adjusting to rising minimum wages, a new paid family medical and leave benefit, and more expensive overtime pay obligations. That’s quite enough for many retailers to absorb, and for some, it could prove to be too much.
Retailers, in fact, are huge contributors to state government revenue with taxable retail sales accounting for roughly half of the general fund state budget. Retail as an industry continues to pull its weight with increased job growth and funding for expanding state services.
Lerch’s revenue forecast shows strong fundamentals in the state economy. Unemployment remains relatively low; job opportunities still are increasing and the already-healthy housing market is about to heat up again. The outlook is strong enough that Republicans in the Legislature have even suggested property tax cuts might be in order.
Revenues to the state have steadily increased every year during the past decade. That puts a lot of steam behind Lerch’s projections for more upward momentum for the state economy.
Retailers urge legislators to ride Washington State’s economic wave into a future without any discussion of a need for new state taxes.