STATEMENT: State’s latest revenue forecast overshadowed by affordability concerns, says budget leader

VANCOUVER… The budget leader for Senate Republicans says today’s positive news about state revenue growth is offset by the continued rise in Washington gas prices and the added pain many Washington workers are about to feel from the state’s new payroll tax.

Sen. Lynda Wilson, R-Vancouver, is chair of the state Economic and Revenue Forecast Council, which met this morning to adopt the second of the state’s quarterly revenue forecasts for 2023. The forecast indicates state government will end the 2021-23 fiscal cycle on July 1 with $335 million more than expected. The 2023-25 biennium, which begins Sunday, looks to be ahead by $287 million since the year’s first forecast in March.

Following the meeting she offered this assessment:

“While this is literally a positive forecast, I see a lot of reason to remain cautious. The predicted uptick seems to be driven more by estimated returns from the new capital-gains income tax, instead of normal economic activity. It was acknowledged today that the final capital-gains numbers may prompt a downward adjustment once they come in, a few months from now.

“Let’s remember also that revenue from income taxes is less predictable, and this tax was upheld by the court only recently. Going forward I would expect people will make more effort to reduce their exposure to it. That is especially true if members of the current majority keep looking to expand the capital-gains tax, as some have already proposed.

“My concern today is less about state government’s financial condition than the hardships being inflicted on families and employers of Washington because their state now has the highest gas prices in the nation. Anyone with the slightest grasp of economics had to know that forcing companies to buy ‘carbon allowances’ from the state would eventually hit consumers. Eight western Washington counties are averaging over $5 per gallon for unleaded regular today, according to AAA, and more are close to crossing the $5 line.

“On top of that, many Washington workers are about to lose money to a payroll deduction, for a state-run long-term care program that will benefit them relatively little if at all. After Saturday, this tax will mean even less take-home pay to put toward necessities like gasoline and other forms of energy, along with food and housing.

“Republicans keep calling attention to the affordability crisis in our state, but unfortunately we seem to be alone in wanting to offer even temporary tax relief that could ease the cost of living here. Instead, the people of Washington are getting another one-two punch courtesy of the Democrats and their government-first approach.”