Washington state revenue projections for the current 2021-23 budget cycle have increased by more than $1.4 billion since November, according to the Washington State Economic Revenue Forecast Council’s February revenue report. The state’s Near General Fund revenues are now projected at $61.7 billion for the biennium ending June 30, 2023.
High inflation rates, along with growth in retail and real estate, are cited as the main drivers for the increase in revenues. Seattle-area inflation rose by 7.6% and inflation is expected to be higher in 2022 and 2023 compared to November projections. However, forecasters expect inflation to decrease after this year.
The state’s unemployment rate continued its steep decline from the start of the pandemic and now sits at 4.5%. Unemployment insurance claims are at the lowest levels ever and personal income has slightly increased since November. Like the rest of the country, Washington is seeing high levels of job openings and resignations.
The February economic and revenue forecast is the first since the start of the new year. The House and Senate are expected to release their draft budget proposals later this week or early next and will consider the forecast when negotiating the final compromise budgets.
The 2022 legislative session is two-thirds of the way through. Bills that did not move from their house of origin yesterday are now considered dead unless necessary to implement the budget. Session is scheduled to end March 10.
For an in-depth review of the state’s revenue forecast, visit the Office of Planning & Budgeting’s website here.