The Modest Decline in State Revenue
Washington State expects to get $66 million less in revenue than first thought. The Economic and Revenue Forecast Council (ERFC) said this in their latest report. This change looks at the money the state expects to get through 2029. The main fund, called the Near General Fund, pays for things like schools, health care, and roads. While the state collected $105 million more than expected in 2025–2027, the forecast for 2027–2029 dropped by $185 million. So overall, the state now expects $66 million less than before.
Primary Reasons for the Downgrade
Dipping Housing Permits
The state expects fewer new houses to be built. Builders are more careful because interest rates are high. Fewer building projects mean the state collects less money from permits, sales taxes, and real estate taxes, especially in big cities like Seattle, Tacoma, and Spokane.
Slower Employment Growth
Jobs are growing slower than first expected. Fewer new jobs mean people earn less money. When income grows slowly, the state collects less in taxes.
Broader Economic Uncertainty:
The economy overall is uncertain. People spend less, and businesses invest less. This also reduces the money the state can collect. Dave Reich from ERFC said the lower forecast is because of fewer housing permits, slower job growth, and slower income growth.
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The Cushion from the Tobacco Settlement
The state will get more money from the Tobacco Master Settlement Agreement. This extra money helps a little but does not cover the losses from the weaker housing and job markets.
Implications for the State Budget and Policy
The state now has less money to spend. The Governor’s office must prepare a budget with fewer resources. Senator Chris Gildon warned that without changes, the state will face money problems. Lawmakers may need to:
- Raise taxes to get more money.
- Cut spending in some state programs.
- Plan for slower growth in the future.
The state needs careful money planning to keep services running.
The Bottom Line for Washington State
Washington State expects $66 million less money than before. The main reason is slower growth in housing and jobs. Extra money from the tobacco settlement helps a little but not enough. Lawmakers must be careful with the next budget and plan for slower growth.
Disclaimer
The news information presented here is based on available reports and reliable sources. Readers should cross-check updates from official news outlets and the Washington State Economic and Revenue Forecast Council.