State revenue forecasts adjusted amid capital gains decline

Jul 3, 2024
Written by WR Communications

Washington’s Economic and Revenue Forecast Council (ERFC) has revised its projections, highlighting a significant downturn in expected revenues and capital gains taxes. The latest forecast anticipates a $665.7 million decrease across the upcoming bienniums. Specifically, projections for the 2023–25 period have been adjusted downward by $476.7 million, with further reduction of $189.0 million for 2025–27, now totaling $66,528.4 million and $71,532.2 million respectively.

This adjustment follows a sharp decline in capital gains tax revenues, which saw collections fall from $847.5 million in fiscal year 2023 to an estimated $371 million in 2024, primarily allocated to the education legacy trust account (ELTA). Consequently, forecasts no longer anticipate contributions to the common school construction account (CSCA) throughout the forecast period, significantly impacting the state’s budget outlook with reductions of $769.0 million for 2023–25 and $972.0 million for 2025–27 compared to previous estimates.

Despite these challenges, the ERFC remains cautiously optimistic, presenting scenarios that suggest potential revenue variances ranging from a surplus of $6,047 million to a deficit of $6,564 million in the years ahead, reflecting ongoing economic uncertainties. These adjustments underscore the council’s commitment to maintaining fiscal balance amidst evolving economic conditions.

ERFC’s meeting handout

TVW meeting video


Return to newsletter