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Sales-tax forecast hit by construction downturn, high downtown office vacancy; B&O policy changes add uncertainty
Summary
Forecast staff reported weak sales-tax growth driven by a sharp drop in construction permit value and rising office vacancy rates downtown. They also flagged state and local B&O tax changes (Senate Bill 5814 and a proposed Seattle B&O restructure) as added sources of uncertainty for business-tax collections.
Forecast Office staff told the Forecast Council that sales-tax collections have been weakened by a marked decline in construction activity and by lower demand for office space that is especially pronounced in the Seattle Central Business District.
Staff showed that the value of building permits issued through June had fallen from a 2016–19 average of roughly $3.9 billion to about $2.0 billion year-to-date, and noted that construction-sector declines were a…
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