Tax collections continue to hold firm above forecasts for Washington state.
The Economic and Revenue Forecast Council's new monthly report on tax collections said Monday that the state treasury grew over the previous month by $72.6 million more than was forecast. That brought total revenue collections through Aug. 10 to a cumulative $80 million higher than was forecast June 19.
In a $33.5 billion two-year operating budget, the changes have minor impact on the state’s overall budget health, but 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 cumulative 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 and occupations and retail sales taxes are still growing compared with 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. Lerch reported that the economy added 6,600 jobs in the state during June, based on a preliminary report. He described that as the most since January and 2,900 more than the June forecast had outlined.
The report said 1,200 of the job gains were due to unexpectedly good growth in manufacturing, led by 500 new jobs in aerospace when a loss of 1,000 was expected. But that is considered a one-time occurrence.
“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,” Lerch’s report stated. “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 (percent) in June.”