Washington Sees Surge in Tax Collections in Latest Revenue Forecast

New projections from the state show Washington’s economy is expected to generate $1.4 billion more in state tax dollars than predicted in November.

The number applies to the current budget cycle that ends mid-2023, which is now projected to be nearly $61.7 billion. Also, projections for the next two-year budget cycle that ends in mid-2025 increased by more than $1.3 billion, which brings the four-year boost in tax collections to $2.7 billion.

The projections are from the state's Economic and Revenue Forecast Council, which gave its updated presentation Wednesday,

The Council's chief economist, Steve Lerch, said the strong real estate market and retail sales are driving the surge in collections, along with inflation, which is pushing retail prices higher, leading to an increase in sales and business taxes.

Republican and Democratic members of the council differed on how the increase in money should be used.

Sen. Christine Rolfes, D-Bainbridge Island, chair of the Senate Ways and Means Committee said the money should be set aside for future spending needs.

“I would caution my caucus to be cautious,” said Rolfes.

Republicans continued their call for tax cuts, saying it would help residents during the current period of high inflation.

"I would still advocate for some sort of tax deduction for our people, said Sen. Lynda Wilson, R-Vancouver.

The new forecast provides the final piece of financial information for supplemental budgets that'll be released from the House and Senate.

The Senate is expected to release its supplemental budget plan early next week, followed by the House.

The next state revenue forecast will be in June