State revenue from tax collections returned $42.6 million or 2 percent lower than forecasted in the state’s latest economic revenue forecast released in February, according to the last revenue update produced by the state Economic and Revenue Forecast Council.
The decrease was driven by a $52.7 million or 2.7 percent lower than expected return for revenue act collections that consist of, among other things, sales and business and occupation taxes. Despite the decrease, tax payment activity grew year over year across sectors that include motor vehicles, nine out of eleven retail trade sectors, including electronics and appliances, and manufacturing.
Seattle-area consumer price inflation is accelerating, according to the report, with CPI rising 3.9 percent between February 2025 and February 2026. That’s compared to year over year growth in December at 3.1 percent. This growth rate is faster than the national average, which increased 2.4 percent year over year in February.