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State revenue sees growth prior to legislative session

Washington state’s 2021-23 budget collections are projected to increase by nearly $898 million according to the Washington State Economic and Revenue Forecast Council’s November quarterly report. The state’s Near General Fund revenues are now projected at $60.2 billion for the 2021-23 budget cycle, which began July 1.

Washington’s budget is benefitting from strong growth in the state’s biggest revenue drivers – sales tax, property tax, and business & occupation tax – as well as the Real Estate Excise Tax. Employment is also seeing strong growth, although it hasn’t yet surpassed pre-pandemic levels, and is expected to remain robust through 2025. Washington’s unemployment rate has declined to 5% from the all-time high of 16.3% recorded in April 2020.

New to this forecast, consumer prices have jumped 6.2% marking the largest inflation seen in the state and nation since 1990. However, inflation is expected to gradually decrease starting in 2022 as supply chain and logistics issues are resolved.

The November quarterly economic and revenue forecast is the last prior to the release of Gov. Jay Inslee’s supplemental budget proposal in early to mid-December and the start of legislative session on Jan. 10. Both the governor and legislature will use the forecast to guide their budget proposals.