This is the monthly report of actual collections and it used to see how accurate the most-recent forecast is.
Since the latest forecast came just last month, this is the first monthly check and it appears to show that things are no worse than expected. According to today’s report by the state Economic and Revenue Forecast Council, November collections are $19.7 million higher than predicted. But forecasters attribute that to patterns in how property taxes are paid and expect next month to correct for the timing.
In fact, had this collection pattern not been an issue tax collections would have been $14.2 million below forecast.
Both of these variances are not considered significant in a state that spends $41 million a day.
Overall, however, the forecast continues to express concern about the global economy and the odds that it could have an ill-effect on Washington’s sluggish recovery.
“The risk of a renewed financial meltdown stemming from the European sovereign debt crisis remains high,” the report stated.
“The key is whether the European policy authorities can be successful in preventing the sovereign debt crisis from turning into a full blown banking crisis. If not, the resulting credit crunch would drag the U.S. and Washington back into recession.
“A secondary risk to the recovery is the political gridlock in Washington D.C. that has fiscal policy sitting it out on the sidelines. This has led to a steady erosion of both consumer and business confidence. For the foreseeable future, Washington’s economic fortunes will be determined by national and international events beyond our control.”
The report did have praise for the deal between Boeing and its machinists union that assures the next generation 737 will be assembled in the state.
“The decision to build the Boeing 737 Max in Renton is great news for Washington’s future but will have its greatest impact on the economy and revenues in future biennia. Its current impact will mostly be through improved confidence amongst the aerospace workforce.”
But the report contained some concern for tax collection patterns, especially in what is known as Revenue Act collections. That’s the law that contains the primary state taxes – sales and business and occupation tax.
“Seasonally adjusted collections came in below last month’s level The three-month moving average of collections
also decreased slightly. While a slight increase had been forecasted, it is too early to tell whether the current
negative variance is a sign of possible future weakness or if it is instead due to the normal fluctuations in revenue
collection due to changes in the timing of payments and reported activity.”
Here is a link to the forecast council’s report.