May Revenue Report is Up and Revenues are Down

Today's report on state revenue collections showed a weakening in tax payments for the April 11 - May 10 collection period. The Economic and Revenue Forecast Council monthly collections reports provide a good real-time indicator of the state economy and how it's affecting state revenues. Based on this, the likelihood of an upturn in the June forecast seems even more remote than it did a month ago.

Excluding special factors (this month’s accounting adjustment and last month’s unclaimed property transfer), collections are $43.7 million (-3.7 percent) below the forecast for the month and are cumulatively $13.6 million (0.5 percent) less than expected for the three months since the February 2008 forecast.

This is interesting.

Only two retailing sectors reported good gains: drug and health stores were up 8.3 percent and payments from gas stations & convenience stores increased 7.5 percent.

And this is troubling.

The Washington economy lost 3,200 payroll jobs in March 2008. Despite the drop, March wage and salary jobs are still 1.5 percent above the year-ago level. The state’s seasonally adjusted unemployment rate, however, jumped from 4.5 percent in February to 4.9 percent in March.

That $2.5 billion hole may be deepening.