Two days before the adoption of the June revenue forecast, the Economic and Revenue Forecast Council has released its latest monthly update. State revenues continue to sink.
Major General Fund-State (GF-S) revenue collections for the May 11 – June 10, 2020 collection period came in $464.8 million (14.8%) lower than the February forecast. About half of this month’s shortfall was due to deferrals of property tax payments allowed by several large counties. These payments are expected to arrive before the end of June.
While many deferred Revenue Act payments from the last two months were received during this collection period, they were largely offset by new deferrals. The net balance of deferred Revenue Act payments, most of which are due by the end of June, is approximately $180 million.
Cumulatively, collections since February 11 are now $893.3 million (11.1%) below the forecast. Adjusted for a large Revenue Act refund and deferred payments in both Revenue Act and property taxes, the cumulative shortfall is approximately $452 million (5.6%).
The ERFC reports on the employment impact.
We have five months of new Washington employment data since the February forecast was released. The 468,800 decline in Washington employment in April was unprecedented in its depth and speed. Even with a slight rebound in May, total nonfarm payroll employment fell 417,600 (seasonally adjusted) in the five-month period. The February forecast expected an increase of 32,600 in January, February, March, April, and May. Private services-providing sectors lost 322,900 jobs in the five-month period. Construction employment declined by 39,500 jobs and manufacturing declined by 32,000 jobs including the loss of 6,700 aerospace jobs. Government payrolls declined by 22,500 jobs in January, February, March, April, and May.
The summary bullet points.
The U.S. economy is now in recession.
U.S. employment increased by 2.5 million jobs in May; the unemployment rate declined to 13.3%.
Real U.S. GDP growth declined 5.0% in the first quarter.
Washington employment increased slightly in May after a record decline in April.
Washington housing permits dropped sharply in April.
Major General Fund-State (GF-S) revenue collections for the May 11 – June 10, 2020 collection period came in $464.8 million (14.8%) lower than the February forecast.
About half of this month’s shortfall was due to deferrals of property tax payments that were granted by several large counties. These payments are expected to arrive before the end of June.
While many deferred Revenue Act payments from the last two months were received during this collection period, they were largely offset by new deferrals. The net balance of deferred Revenue Act payments, most of which are due by the end of June, is approximately $180 million.
Cumulatively, collections since February 11 are now $893.3 million (11.1%) below the forecast. Adjusted for a large refund and deferred payments in both Revenue Act and property taxes, the cumulative shortfall is approximately $452 million (5.6%).
We’ll know more Wednesday.
