State Relations

October 11, 2021

First 2021-23 economic and revenue forecast shows strong budget collections

The Washington State Economic and Revenue Forecast Council projects 2021-23 state budget collections will increase by more than $927 in their newly published September quarterly report. The report is the first since the end of the 2019-21 biennium. The state’s General Fund revenue is now projected at $59.3 billion for the current two-year budget cycle, which began July 1.

Real estate excise taxes are the main driver of the improved revenue collections with residential real estate sales remaining strong and commercial sales seeing a significant increase. Retail sales tax collections were also stronger than forecasted in the June quarterly report.

Washington state employment stays steady with the unemployment rate unchanged at 5.1%. An increase of 2.4% in the state’s employment is expected this year, with average growth between 2022-25 projected at 2.2% per year.

The forecast also shows higher personal income and inflation in the state since the June report. The state’s inflation numbers match the national average, while personal income is expected to begin slowing next year due to decreasing federal stimulus dollars meant to help the economy recover from the COVID-19 pandemic.

Compared to this time last year, Washington state’s economy is in a much better position. The 2022 legislative session is approaching, beginning on January 10, with state legislators focused on making fixes to the 21-22 biennial budget. While the September outlook shows strong budget collections, the ongoing pandemic’s impacts on the economy and economic growth mean state revenues will remain fragile and uncertain.

For more information, view the Council’s September economic and revenue forecast documents here.