The latest state revenue forecast shows strong tax collections should continue, which prompted Republicans to call for a break on the gas tax.
Those revenue collections are projected to be nearly $1.5 billion higher than the February forecast – driven partly by inflation – so Republicans on the Economic and Revenue Forecast Council suggested a special session to pause the gas tax through at least year’s end. State Senator Lynda Wilson says they have the funds and need to help Washingtonians. “This is a good opportunity to do it,” Wilson says, “We still would have revenues…sufficient revenues, but I think that we need to do that now.”
David Schumacher, director of the State’s Office of Financial Management, reminded the group that the state has obligations, and he says if the pessimistic forecast comes true, a 6-billion dollar drop would be a hard hit. Schumacher says, “A recession would give us a deficit in our current outlook, so I think we gotta be careful about just how quick we are to make drastic changes here.”
The state’s chief economist, Doctor Steve Lerch, told the council that with recession a real possibility, their forecasts do also show a slowing of tax revenue growth in the next few years. Lerch says there is a fair chance the Fed raising interest rates will push the economy into a recession. He says with a couple more interest rate increases expected, that could also cut into the collection of the state’s real estate excise tax.
According to the State Economic and Revenue Forecast Council, “total Near General Fund revenues are now projected at nearly $63.2 billion for the current two-year state budget cycle, which began July 1, 2021.”
“The council also increased the net Near General Fund forecast for the next biennium (2023–25) by nearly$632 million. The council projects Near General Fund revenues will total nearly $66 billion for the next biennium, which begins July 1, 2023.”
The next revenue forecast is September 23rd.
