Economic updates released Wednesday show the state is experiencing flat revenue and job growth, along with a slowing of new home construction.
The Economic and Revenue Forecast Council projected the state will collect about $25 million more in tax revenue through 2015 than expected. The total general fund balance is expected to be $33 billion for the current two-year budget cycle.
“If we look at changes in the forecast, they’re quite small,” said Steve Lerch, the state’s chief economist. “We continue to forecast slow economic and job growth for both the national and state economies.”
Lawmakers use the forecast as a guide when writing the state’s budget. Gov. Jay Inslee will release a supplemental budget proposal in December.
David Schumacher, director of the Office of Financial Management, said the projections make it “difficult for us to spend money on any new incentives or programs.”
“It’s enough to hold steady and not much more than that,” Schumacher said.
On the positive side, sales of existing homes in Washington continues to be strong, Lerch said.
But those homes have become slightly less affordable because of rising prices and mortgage rates, he said.
At the same time, new home construction appears to be slowing. “The thing we’re a little concerned about is we’ve seen a decrease in housing permits since April 2013,” Lerch said.
The latest unemployment figures were also released Wednesday.
Washington lost 9,500 jobs over the last two months, reversing a nearly two-year trend of positive job growth in the state.
Still, the state’s unemployment rate remained mostly the same — 6.9 percent in September and 7 percent in October. That’s compared to 7 percent in August.
September and October jobless numbers were released at the same time because the federal government shutdown prevented the employment agency from releasing the figures on time.
Paul Turek, a labor economist with Employment Security Department, said in a statement the drops are likely a result of “statistical adjustments and some softening of the economy.”
“We enjoyed a very long growth streak, but we should expect there will be ups and downs over time as the recovery gradually strengthens,” Turek said.
The state previously reported 22 straight months of job growth.
TVW taped Wednesday’s meeting of the Economic and Revenue Forecast Council – watch it here.