Sales tax collections for June have exceeded projections, reaching $6.4 million, which is only $40 off from the forecast. Year-to-date collections stand at $36.7 million, falling short of the projected $37.4 million by approximately $700,000. Despite this shortfall, the year-over-year growth rate has improved to 1.7%, up from under 1% last month, although it remains below the 2% budgeted target.

The meeting also highlighted concerns regarding economic indicators, including a 30% chance of recession within the next year, as predicted by a Bloomberg survey of economists. GDP growth is projected at 2.3% for 2024, with a slight decline expected in 2025, followed by a modest increase in 2026.

Additionally, the discussion touched on the public safety sales tax, which is significantly lower than other sales taxes due to its allocation structure—60% of the revenue is retained, while the remaining 40% is distributed per capita.

Economic challenges were underscored by rising unemployment rates in Washington, which increased to 4.9% in May from 3.8% the previous year. The rising costs of shelter are impacting consumer spending, particularly in retail sectors, as these costs are not subject to sales tax. Furthermore, tax receipts from cigarettes and liquor have also fallen below forecasts, indicating a shift in consumer behavior.

A concerning trend was noted regarding credit utilization rates among borrowers, with an increasing number using 90% to 100% of their available credit. This trend raises alarms about potential delinquency as more individuals find themselves financially stretched.