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Washington state revenue collections down for May (so, what else is new)

Post by Peter Callaghan / The News Tribune on June 13, 2011 at 2:21 pm with 10 Comments »
June 13, 2011 2:23 pm

Serving perhaps as a preview for this Thursday’s quarterly revenue forecast, state economist Arun Raha released the May tax collections report today. And yes, they were down…again.

Here is a link to the pdf of the actual report.

But if you don’t want to read all 10 pages here are the nut graphs…

The rate of national economic growth has slowed considerably. The weakness evident in first quarter data appears to have extended into the second quarter as well. However, headwinds are likely to recede in the second half of the year, and growth should pick up then.

The Washington economic recovery has slowed since March after fairly strong growth at the end of 2010 and early 2011.

Major General Fund-State (GF-S) revenue collections for the May 11 – June 10, 2011 collection period came in $69.7 million (4.0%) below the March forecast due to a sharp slowdown in economic activity in April. Cumulatively, however, collections since March are still $93.1 million above the forecast due to last month’s receipts from the amnesty program for past due taxes.

Generally, Raha appears to blame external factors – war, earthquakes, tsunamis.

“Geopolitical developments in the Middle East and North Africa boosted oil and gasoline prices, eroding consumers’ purchasing power and confidence.” he wrote. “The Japanese earthquake and tsunami continues to
pose a threat to the state’s recovery. Japan is the state’s third largest export market.”

But Raha thinks there is a silver lining to this latest economic black cloud.

“Eventually reconstruction activity will be a plus for our state’s economy but in the near
term the devastation has disrupted supply chains and reduced demand for Washington
products.”

Remember, the forecast is done quarterly and is a projection of what is to come. The monthly collections report covers the actual tax collections. That is, it reports money in hand and is one measure of how accurate the previous quarterly forecast is. In Dickensian terms, the monthly collections are the Ghost of Christmas present while the quarterly forecast is the Ghost of Christmas yet to come. (And no, I am not suggesting that Raha is Scrooge. Actually he more-accurately cast as Jacob Marley).

As has been the case for much of the Great Recession, the monthly collections have been below forecast and have served as a predictor of where the next forecast might be heading. Distressingly, that has nearly always been down.

Leave a comment Comments → 10
  1. With the sales tax at 10% we only buy food and gas on a daily basis. All other needs, i.e., bulk foods, meat, clothing, and other household needs are purchased in Oregon every 90 days. Saves big bucks!!!

  2. actually sales (retail) have been the pits for months – so sales tax will be too

  3. tree_guy says:

    ” Actually he more-accurately cast as Jacob Marley” Callaghan

    Close Peter! In Dickens Christmas Carol Marley was wearing the chains. In this case it’s the taxpayers.

  4. I feel TheMASO has the right idea.I too limit how much I buy in Washington State.Until the legislators control their spending,I will continue to refuse to aid and abet their out of control spending habits.I will only buy the absolute necessities.

  5. alindasue says:

    TheMASO and sincere,

    Given that bulk foods and meat (half the items in TheMASO’s list) aren’t any more taxable than other foods here in Washington, are you really spending enough on clothing and other household goods to justify the fuel costs and vehicle wear of regular round trips between Pierce County and Oregon?

    I know we don’t.

    Using our smallest car (and assuming our only travel food is a packed sack lunch), we’d have to buy over well over $300 in “taxable” (non-food) items every time we made such a trip just to break even.

  6. alindasue,Notice I wrote that I just purchase the absolute nesessities.Being on a fixed income and informed by the Social Security Office that due to there being no cost of living increases for consumers,there would be no raises in Social Secutity payments for 2 years,and maybe 1 more year after that.I find that I now carefully plan my trips so I can do more with one trip.This is called adjusting to existing conditions.Or a better way to put it is,I refuse to spend money that I don’t have.I feel with that attitude,I would never be elected to any Public Office!

  7. BigSwingingRichard says:

    I heard from President Obama that the recession is over and happy days are here again. Then again, he was whistling past the graveyard when he said it.

  8. olympicmtn says:

    The Great Recession is more like a Depression!!! This next election is about JOBS JOBS AND JOBS. The blue blood Dems are ticked off with the administration and their inept ability to flippin understand people who actual work vs. live off the government coffers and complain about having a pension (for Pete’s sake). Why don’t the politicians ask the people who are unemployed (especially those actually seeking work vs. living off the 99 unemployment free paychecks fiasco). People who work are tired of picking up the pieces and paying higher fees and taxes for deadbeats sucking off government money. This goes for both classes of people. I ran into a neighbor who is a contractor who hasn’t worked in months, owns 3 homes and over his head in debt. Why? Because he was lured by the HGTV crowd to use his equity to remodel his kitchen for a million dollar home. Then I ran into a VP who got canned from his executive job in Seattle has 2 homes and is doing consulting. So forgive me if I have no patience for Olympia politicians telling me the economy is getting better. The canary has sung and it is dead in the mine! There is no more bird feed to go around. Cut, Cut Cut

  9. olympicmtn says:

    And Yes go to Oregon and save money. I saw Gov. Gregoire there shopping at Nordstroms in 2004 and my mother spotted her buying shoes at the downtown store!!! She even told her “Glad to see you shop and save in Portland!” I know she did not pay sales tax. Hypocrite abound. And then look at Rep. Weiner who now got caught switching his DMV license plates in NYC and has not paid tabs for 3 years!!! He used his Honda plates for his Pathfinder. What chutzpah!

    And Yes Portland is cheaper for food too. You can go to a restaurant in Portland get beer, wine and food for under $15. And no sales tax.

    Olympia is in la la land and can’t see past their nose what reality is these days. Do what you can to save money because the politicians protect themselves first and your money and savings last!!!

  10. Ahem, pardon me. It’s called a RECESSION, people. Blaming Obama for it doesn’t fix it, raising sales taxes doesn’t fix it, cutting aid to families already on assistance doesn’t fix it.
    WAR fixes it! The last three major wars (WWI, WWII, Viet Nam) fixed the last three major recessions. I don’t mean sending a miniscule 80,000 troops to Afghanistan, I mean pissing off the whole region and sending in 500,000 troops to fix it up. The Nation will produce! Tanks, weapons, ships, bulletts, we will do what we do as a Nation and PRODUCE!
    Now, there will be some casualties. But, they won’t be the sons of Senators, or Congressman, or rich people. Like always, we’ll just send people of color or other people that can’t otherwise find work to do the killing and dying. Think of the feeling of patriotism they will earn by giving up life and limb for “Old Glory”. I’m getting choked up thinking about it.

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