Office of Planning & Budgeting

March 21, 2019

March Revenue Forecast Shows Consistent Growth

The Washington Economic and Revenue Forecast Council (ERFC) released their March revenue forecast on March 20. The projected Near General Fund-State (NGF-S) revenue forecast for the current 2017-19 biennium increased by $307 million, while the projected revenue collections for the upcoming 2019-21 biennium increased by $553.5 million. The report shows a similar forecast as that published in November.

Here is a quick summary of the total projected Near GF-S revenue for each biennium:

  • $46.106 billion for the 2017-19 biennium, 18.1 percent more than the 2015-17 biennium
  • $50.555 billion for the 2019-21 biennium, 9.6 percent more than the 2017-19 biennium
  • $54.358 billion for the 2021-23 biennium, 7.5 percent more than the 2019-21 biennium

A bit more context about these numbers:

  • Cumulative major GF-S revenue collections were 3.7 percent higher than forecasted in November. Nearly one third of this extra revenue can be attributed to non-economic factors including one-time large payments and early payment of taxes. Accounting for these factors, collections were about 2.6 percent higher than forecasted in November, and are primarily due to stronger-than-expected taxable activity.
  • Washington’s February unemployment rate has maintained consistent at 4.5 percent, unchanged from recent months but higher than in the November forecast.
  • Personal income decreased slightly compared to the November forecast. Despite this, WA personal income growth has outpaced the county in 26 of the last 35 quarters.
  • Cumulative real estate excise taxes (REET) accounted for 11.2 percent of GF-S collections. Revenue associated with the sales of large commercial properties was significantly above forecasted levels.
  • Major threats to the U.S. and Washington economies remain, including international trade concerns, geopolitical risks, and a maturing economic expansion.

The forecast points out that lawmakers have already taken steps to increase revenue in the current legislative session. Substitute Senate Bill 5581, which Governor Inslee signed on March 14, will facilitate the collection of state taxes on online sales by out-of-state vendors and is estimated to increase GF-S revenue by $115 million in the 2019-2021 biennium and $190 million in the 2021-23 biennium.

Budget writers in the Senate and House will use this updated forecast of projected 2019-21 revenues as a baseline for their budget proposals. We look forward to reviewing these proposals as soon as next week! Stay tuned to the OPBlog for updates on the legislative session and state budget proposals.