September Revenue Forecast Update
The Washington State Economic and Revenue Forecast Council just released its September revenue forecast. From the September Report:
“Total nonfarm payroll employment rose 19,800 (seasonally adjusted) in May, June, and July, just 1,600 more than the 18,300 expected in the June forecast…The construction sector added 700 jobs in the last three months…Government payrolls expanded by 1,800 jobs in the last three months.”
And specifically on housing:
“…Washington housing permits declined sharply from an eight-year-high 53,600 units (SAAR) in the first quarter of 2015 to a more sustainable 36,800 units in the second quarter…In the June forecast we viewed the first quarter surge in permits with skepticism both because the weather was unseasonably mild and because the strength was in the volatile multi-family segment…Seattle home price appreciation has slowed in recent months. According to the S&P/Case-Shiller Home Price Indices, seasonally adjusted Seattle area home prices increased 0.2% in June following a 0.1% decline in May. Seattle home prices are still up 7.4% over the previous June and are 35.2% higher than the November 2011 trough. Seattle area home prices have recovered to just 6.1% below the May 2007 peak.”
The major general fund-state revenue collection for the August 11 – September 10 timeframe came in 3.0% above June’s forecast – a total of $38.9 million. Total payments in the retail trade sector were up 7.0% year over year. Payments from motor vehicles and parts sector increased by 13.8% year over year. Specific retail sectors showing strength include nonstore retailers, drug and health stores, furniture and home furnishings, and electronics and appliances. Gas stations and convenience stores had a year-over-year decline in payments by more than 4%.
What does this mean for state lawmakers? It means that lawmakers have more than $100 million more available to them through the middle of fiscal 2015, and that they’ll have an additional $365 million more than additionally projected for the 2015-2017 biennium. In July lawmakers reached a biennial operating budget agreement that totaled nearly $38 billion. The growing economy means that the 2017-2019 budget is projected to be $41.3 billion.
The next forecast is scheduled to be released later this year on November 18.
View the full revenue forecast update here.