(The Center Square) – Washington state revenue continues to climb as regional inflation is above the national average and statewide personal incomes are down, according to a new report by the Economic Revenue Forecast Council, or ERFC.
Although state revenue is forecasted to increase by more than 20% at the end of the current biennium compared to 2019-21, growth is expected to slow down entering the 203-2025 biennium.
By the end of 2023, the state is forecasted to generate $64.5 billion in total revenue, an increase of 21.4% from the 2019-21 biennium. Revenue for the General Fund State, or GF-S, since ERFC’s February report was up $590 million, or 6.4%, more than what was estimated. The GF-S is the state’s primary revenue fund. However, state revenue is expected to increase by only 4.5% between this biennium and the 2023-2025 biennium.
The report attributes some of the increase in revenue due to inflation, stating that “as people and companies were able to largely maintain their level of real spending in the early months of the inflation spike, their nominal spending and hence taxable activity was boosted by the increase in prices.”
In particular, the Seattle area’s consumer price inflation is above the national average – 9.1% compared to the national 8.2%.
“These relatively high rates were partially due to much higher food and energy prices this year compared to last year,” the June report stated. Putting food and energy aside, core prices still rose 7.8% in the Seattle area.
At the same time, the report found that Washington’s total personal incomes are $17.8 billion, slightly down compared to $17,898 billion in March. The report argues that incomes have been “undermined by the withdrawal of the extraordinary stimulus of the previous two years.”
ERFC’s next meeting is scheduled for Sept. 12.
