By Sydney Brown
WNPA news service
Although unemployment and consumer insecurity remain high, Washington State Economic and Revenue Forecast Council officials told lawmakers on March 3 that they were optimistic that a brighter economic future was on the way to Washington.
Steve Lerch, the council’s executive director, expects tax revenue to exceed November 2020 estimates by $ 593 million.
Lerch said US retail and grocery tax revenue rose 5.3 percent, and Washington earnings were close to the national average. Most consumers still have reservations about going out, Lerch said, but major tax sources like utilities and tobacco made more income in January 2021 than they did in January 2020.
Senator Lynda Wilson, R-Vancouver, said the forecast strengthened the Republican argument against a controversial democratically-run capital gains tax because it demonstrated the lack of a need for the excise tax. SB 5096 is scheduled for a vote in the Senate.
“We don’t need any more taxes. We’re fine, ”said Wilson.
Although more people are now unemployed than in November, the council expects employment to grow by 2.2 percent by mid-2021, Lerch said. According to the State Employment Security Department in December 2020, the unemployment rate in Washington state is still 7.1 percent.
“It has certainly improved, but it is still well below what it was before the pandemic,” Lerch said.
According to Lerch, economists also expect gross domestic product rates to change for the better. GDP is expected to hit pre-pandemic levels and could be even stronger by mid to late 2021.
Washington construction and housing also had a better year than expected, Lerch said. Housing permits and large commercial real estate transactions increased, as did construction projects. After a slowdown in 2019, Seattle home prices remain high, Lerch said.
Oil prices are also higher compared to the November economic forecast. However, Lerch said these prices will gradually decrease after mid-2021.
Industrial production in the nation continues to improve, Lerch said, but remains about 2 percent lower than it was in January 2020.
About one in four households in Washington reported that it was difficult to pay their usual expenses, according to the US Census Bureau’s February 3-15 Household Impulse Poll. This is slightly lower than the national average, where roughly one in three Americans struggled to cover their usual expenses.
People are also saving their money at an “unusually high” level, Lerch said.
Although not at the level before the pandemic, said Lerch with stimulus packages at the state and federal level and efficient COVID-19 vaccine rollouts, economists see “the economy in a more positive light”.