The Economic and Revenue Forecast Council’s monthly report on tax collections says Washington’s treasury grew by $72.6 million more over the last month than was forecast. That brings total revenue collections through Aug. 10 to a cumulative $80 million higher than the last quarterly revenue forecast on June 19.
See the report covering July 11 to Aug. 10 tax receipts here. In a $33.5 billion two-year operating budget, the changes have minor impact on the overall general fund health – although budget writers always welcome gains.
State economist Steve Lerch said timing was part of the reason for the better-than-expected report. A $22 million tax refund was assumed in the forecast but did not occur yet, so the actual adjusted gains are closer to $50.1 million above forecast for the month and $57.6 million cumulatively since the June forecast. The latter gain is 2.3 percent higher than the forecast.
The gains continue to be fed by sales of commercial property, for which real-estate excise taxes accounted for $34 million of the good news.
The report says business-occupations and retail sales taxes are still growing compared to a year ago, indicative of the ongoing economic recovery.
“The preliminary estimate of B&O tax growth is 9.5 percent year-over-year and the preliminary estimate of retail sales tax growth is 6.4 percent,” the report says.
Employment also is improving, as this report excerpt explains:
According to the preliminary estimate, the state’s economy added 6,600 jobs in June, the most since January. The June job growth was 2,900 more than the 3,700 expected in the June forecast. Manufacturing employment unexpectedly increased 1,200 (the forecast had assumed a decline of 800) mostly because the aerospace sector added 500 jobs (we had expected a decline of 1,000 jobs). Outside of aerospace, the manufacturing sector added 700 jobs. Construction employment grew by 1,000 during June but government employment remained weak with a loss of 200 jobs. Washington’s private service-providing industries added 4,600 jobs in June, which was slightly stronger than the 4,000 expected in the forecast. The state’s unemployment rate held steady at 6.8% in June.
The surprising increase in aerospace employment in June was likely a one-off event. We believe the trend is still negative though this downturn will be relatively mild due to the large backlog of orders. The Institute of Supply Management - Western Washington Index (ISMWW) continues to indicate sustained, moderate growth in the broader manufacturing sector.