For many months, we’ve reported on collections reports exceeding the state budget forecast. Not today. The latest report from the Economic and Revenue Forecast Council shows tax receipts almost perfectly aligning with expectations.
Major General Fund-State (GF-S) revenue collections for the June 11, 2021 – July 10, 2021 collection period came in $5.3 million (0.2%) higher than forecasted in June. Revenue Act collections were $13.4 million (0.8%) lower than forecasted while the sum of all other tracked collections was $18.7 million (3.7%) higher than forecasted.
Collections remain elevated, though as the ERFC reports,
Seasonally adjusted collections decreased from last month’s spike (see figure).
Here’s the referenced graph:
We’ve also become accustomed to writing that Washington’s economic performance was consistently among the best the nation, so this comment in the ERFC report is also a departure.
In June, after the forecast was complete, the U.S. Department of Commerce, Bureau of Economic Analysis (BEA) released state personal income estimates for the first quarter of 2021. According to these estimates, Washington personal income rose from $524.7 billion (SAAR) in the fourth quarter of 2020 to $579.7 billion in the first quarter of 2021. The 49.0% increase (SAAR) in Washington personal income was the 46th best among the states and District of Columbia and was significantly lower than the 59.7% growth rate for the U.S. as a whole.
The ERFC explains,
Once again, changes to personal income from Covid-19 relief programs dominated overall personal income growth, accounting for 90% of Washington personal income growth in the first quarter. Most of this was in the form of another round of direct payments to individuals. Washington’s below average personal income growth was almost entirely due to a below average contribution of transfer receipts which added 55.3 percentage points to U.S. personal income growth but only 44.9 percentage points to Washington personal income growth.