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Washington state revenue collections down a bit in June; Don’t worry, counsels economist Arun Raha

Post by Peter Callaghan / The News Tribune on July 11, 2011 at 2:13 pm with 11 Comments »
July 11, 2011 3:43 pm

The July collections report was just released by state economist Arun Raha and the bottom line that most state budget writers and state budget beneficiaries look for is this – collections from existing state taxes was $22.3 million below what was expected in the quarterly forecast released just three weeks ago.

But Raha quickly adds that the lower collections are expected based on his current view of the immediate future – short-term slowing in the national and state economies followed by a firming up in the second half of 2011.

“Collections are consistent with the forecasted slowing of second quarter activity with improvement
expected in the third and fourth quarters,” the forecast stated. Of the $22.3 million total, $4.1 million was due to a large and unanticipated tax refund and not related to the economy. That drops the economy related decline to $18.2 million – about 1.4 percent.

 

In an e-mail Monday afternoon, Raha added this:  ” We consider collections to be consistent with the forecast as long as adjusted variance is within ±2.5% of target. So since we were -1.4% of target, collections were consistent with the forecast.

This report was about revenues collected from activity in May, and the adjusted growth in collections slowed as we had expected,” he wrote. “In fact it slowed 1.4% more than we had expected. But it was consistent with the forecast. Here’s the funny part, I would said the same thing if we had come in 1.4% above forecast – that collections slowed consistent with our forecast, coming in 1.4% above target.”

Here are the summary paragraphs of the forecast:

The national economy is performing as expected in our forecast last month. Both economic and labor market activity weakened further in June, but there were also enough signs that this weakness is likely to be temporary, absent a low probability high impact event.

Washington’s economic activity is expected to mirror that of the national economy – short-term weakness followed by firming in the second half of the year.

Here’s a pdf of the 10-page July 11 economic and revenue update.

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Leave a comment Comments → 11
  1. tree_guy says:

    “revenue collections down….don’t worry counsels economist Arun Raha”

    hahhahahahahahahahahahaha…don’t worry….hahahahahahahahahahah

  2. dirtydan54 says:

    Arun Amuk Haha, gee now theres uplifting news. Guess you always need to adjust your voo-doo future financial predictions based on past predictions and results huh? Mr.Haha

  3. When economists tell me not to worry,I feel that when its time to start to worry,because I think the next words out of their mouths will be,We need more higher taxes and fees!!!!

  4. Chainsaw says:

    Hey tree_guy! Aren’t you the one who predicted that Raha would over forecast every month by $10 billion for the rest of Gregoire’s term. Well, $18 million is not the same as $10 billion. So you were wrong? Eh?

  5. tree_guy says:

    Chainsaw@

    Probably when Raha read my scathing critique of his overly optimistic forecasts he decided he’d better clean up his act. You are correct, he was only 1.4% off ….this time. Maybe he’s learned his lesson or maybe he’ll revert to his clumbsy forecasting techniques of the past.

  6. I laughed so hard when I read this I almost peed myself. Raha needs to take his act on the road. He’ll kill ‘em.

  7. crusader says:

    …that’s the problem with socialism. sooner or later you run out of other people’s money.” Margaret Thatcher

  8. …that’s the problem with socialism. sooner or later you run out of other people’s money.” Margaret Thatcher

    Thatcher would be called a socialist by today’s “conservatives.”

  9. randydutton says:

    Every month Raha is wrong. Why isn’t the press questioning his numbers?

    He always overestimates revenue and underestimates expenses.

  10. Peter Callaghan says:

    Arun Raha doesn’t have anything to do with expenses. He forecasts revenue only. The Legislature appropriates and the governor’s office of financial management tracks expenses.

    Much has been written about the forecasts since the recession began in March, 2008. Raha and his staff have not been alone in underestimating the depth and length of this recession. Most forecasts in most states (as well as the forecast based on the governor’s council of economic advisers made up of private sector economists) have failed to forecast this recession acurately.

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  11. randydutton says:

    Expect sales tax revenue for the next quarter to be lower than projected. Traveling is down, and the Recession isn’t letting up.

    We won’t see a major improvement until first quarter 2013. That is when the Republicans take the White House and reinstall job friendly rules.

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