State revenue collections beat projections; inflation-adjusted collections now higher than before recession

As the Washington Research Council writes, this month’s revenue collections came in slightly above the September forecast. The numbers in the economic and revenue update come with a caution about a one-time occurrence.

Major General Fund-State revenue collections for the September 11 – October 10, 2015 collection period came in $27.9 million (2.2%) above the September forecast.

During the period there was a $6.1 million audit payment that was not included in the forecast. Without this payment, collections would have been $21.8 million (1.8%) higher than forecasted.

The WRC notes:

This is the first collections report since the September 14 meeting at which the ERFC revised downward (by about $1 million per month) its forecast of revenue over the remainder of the 2015-17 biennium.

We’re always interested in jobs. The economic and revenue updates provides some generally good news.

Washington employment continues to grow at a solid rate. Total nonfarm payroll employment rose 23,900 (seasonally adjusted) from April through August, a 3.1% rate of growth (SAAR). As is usually the case, most of the jobs created in the last four months were in private, service-providing sectors which added 22,000 jobs. The construction sector added 700 jobs but the manufacturing sector lost 1,400 jobs of which 700 were in aerospace. Government payrolls expanded by 2,700 jobs in the last four months.

Jordan Schrader reports that the state has now fully completed its “long rebound from the recession.” Citing an analysis by the Pew Charitable Trusts, Schrader writes that the state has collected more in inflation-adjusted taxes than it did at the pre-recession peak.

“For the first time, Washington moved onto the list of states where tax revenue has recovered from the recession, with receipts 0.6 percent above their prior peak,” according to the Pew analysis.


He includes an important clarification.

Pew’s figures account for inflation and seasonal effects, which is why they are slower than official state collection reports to show a recovery. (Another variation lies in which taxes to count; Pew relies on Census data on total taxes, not just taxes that go to the state’s main account.)

The story includes discussion of how volatile capital gains taxes functioned during the recession and recovery. It’s worth your time.