October 24, 2017

September Revenue Forecast Indicates Moderate Increase in Projected Revenue

Last month, the Economic and Revenue Forecast Council (ERFC) released their September revenue forecast, the first forecast of the current fiscal year. The forecast increased projected General Fund-State (GF-S) collections by $279 million for the current 2017-19 biennium and $243 million for the upcoming 2019-21 biennium. These increases are on top of increases projected in the June revenue forecast.

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

• $38.311 billion for the 2015-17 biennium, 13.8 percent more than the 2013-15 biennium
• $43.262 billion for the 2017-19 biennium, 12.9 percent more than the 2015-17 biennium
• $47.396 billion for the 2019-21 biennium, 9.6 percent more than the 2017-19 biennium

Behind the numbers:

• The forecast is similar to the June forecast, but with slightly higher revenue projections. Most of the extra collections are projected to occur in the current biennium, which began on July 1, 2017.
• The forecast attributes most changes in revenue to legislation that was passed in 2017 session, after the June forecast. The largest increases came from an increase to the state property tax levy for basic education and from an extension of retail sales and B&O tax liability to more categories of online sales. The legislature also repealed a sales tax exemption for bottled water. These legislative changes accounted for an additional $2.4 billion in the current biennium.
• Similar to the June forecast, concerns cited in this forecast include slow U.S. economic growth, weak labor productivity growth, and international trade concerns.

As a reminder, there will be one more forecast in November, on which the Governor will base his proposed 2018 supplemental budget (amending the enacted 2017-19 biennial budget).

Stay tuned to the OPBlog for updates on revenue forecasts and the upcoming 2018 legislative session.