Washington’s September economic and revenue forecast was released Tuesday with state revenues projected to reach $66.7 billion for the 2023-25 budget cycle, which began July 1. This is an increase of 3% over expected revenue in the 2021-23 biennium. Most of the additional revenue comes from retail and sales use, business and occupation (B&O), public utility, and non-cigarette tobacco product taxes. Real estate excise tax (REET) collections also came in higher than anticipated.
The Workforce Education Investment Account (WEIA), which funds many higher education priorities including student financial aid and faculty and staff compensation, saw increased projections of $28 million in the 2023-25 biennium bringing total estimated WEIA revenue to $838 million.
In Washington, total employment increased by 4,800 with August seeing the largest gains. The health care sector had the biggest increases in employment followed by construction and manufacturing. The state’s unemployment rates continue to trend down with the rate at a historic all-time low since employment data started being tracked in 1958. Overall, employment is expected to increase by 2.3% this year. This is in stark contrast to three and a half years ago when the pandemic was raging and Washington unemployment rate saw an all-time high of 16.3%.
As a whole, Washington’s economy is trending in the right direction. Personal income in Washington is also growing and Seattle-area home prices stopped declining in June for the first time in 11 months. However, it is worth noting that forecasters are keeping an eye on consumer price inflation in the Seattle area, which is higher than the national average, and energy prices. At the national level, higher interest rates, grain and oil prices, and the federal shutdown are the biggest threats.
More details can be found in the September economic and revenue forecast on the Washington State Economic and Revenue Forecast Council’s website here.