OLYMPIA — A new report from the Washington State Economic and Revenue Forecast Council estimates an increase of $1.46 billion in tax collections for the state's current two-year budget, which was passed in 2021.
In a forecast released on Wednesday, the council attributed the increase in tax revenue to the continued strong housing market in Washington, low levels of unemployment, and more spending prompted by rising rates of inflation.
"Continued strong revenue collections and high inflation have again resulted in increases in the revenue forecast," said Steve Larch, the council's executive director, in the press release.
Under state law, the council produces the economic forecasts used by Washington legislators to craft the state's biennial and supplemental budgets.
According to the council, the state's total general fund revenue for the two-year budget period that began on July 1, 2021, is expected to reach $63.2 billion. The council also raised its forecast for the general fund for the next two-year state budget, which begins on July 1, 2023, by roughly $632 million to $66 billion.
Jason Mercier, director of the Washington Policy Center's Center for Government Reform, said the new forecast means state officials like Gov. Jay Inslee should make tax relief for Washington residents a priority, citing statements from New York Gov. Kathy Hochul and California Gov. Gavin Newsom about the need for tax relief in their states.
"State officials now have an additional $1.5 billion to finally prioritize tax relief to help Washingtonians mitigate some of the impacts of record inflation," Mercier wrote in an email sent to reporters on Wednesday. "Failing to do so will make it clear that the taxpayers are merely viewed as an ATM for the politician's spending agendas, rather than being deemed worthy by their public servants of keeping more of their own money to meet their needs in the face of rapidly rising prices."
In a report released on June 14, the U.S. Bureau of Labor Statistics said that the consumer price index in the United States rose an average of 8.6% over the 12 months ending in May 2022, with energy prices posting a 34.6% rise during the same period while prices for food rose 10.6% and non-food and non-energy prices rising 6.2% — the biggest 12-month increase since November 1981.