February 15, 2018

February Revenue Forecast Shows Largest Increase since Recession

Today, the Washington state Economic and Revenue Forecast Council (ERFC) released their February revenue forecast. The projected General Fund-State (GF-S) revenue forecast for the 2017-19 biennium increased by $647 million. Projected revenue collections for the 2019-21 biennium have also increased by $671 million. According to the Governor’s Office of Financial Management (OFM), this forecast is the “largest quarterly increase for the state since before the Great Recession.”

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

• $44.213 billion for the 2017-19 biennium, 15.4% more than that of the 2015-17 biennium.
• $48.253 billion for the 2019-21 biennium, 9.1% more than expected 2017-19 biennial.
• The initial forecast for the 2021-23 biennium is $51.932 billion, an increase of 7.6% over that of the 2019-21 biennium

Behind the numbers:

• Cumulative major General Fund-State (GF-S) revenue collections from November 11, 2017 through February 10, 2018 were $185 million (3.5%) higher than forecasted in November.
• The Washington economy saw strong housing construction and home price appreciation. Cumulative real estate excise taxes (REET) came in $44 million (21.1%) higher than forecasted. Projected property tax receipts are also 3% higher than expected.
• For the first time in nearly three years, Washington exports increased (0.6%) in the fourth quarter of 2017.
• The forecast anticipates continued but slowing growth in employment (2.2%) and personal income (4.6%). Disposable personal income is also higher than assumed (5.0%) than November because of federal tax cuts.

We expect that the majority leadership in the House and Senate will release budget proposals early next week. Stay tuned to the OPBlog for updates!