State revenue forecast trimmed as tariffs and weak hiring damp growth, ERC tells finance committee

Dr. Reich, an economist with the Economic and Revenue Forecast Council, told the Finance Committee during a hybrid work session that Washington’s economy is expanding only modestly and that rising tariffs and federal spending disruptions are the principal risks to near‑term revenue collections.

"Dealing with risk is probably the more important part of our judgment," Dr. Reich said, describing the council’s mix of statistical models and judgment in forming forecasts.

ERC staff explained the forecasting process used to produce the council’s official numbers: staff generate national and state economic scenarios (the federal model is a modified S&P model and a separate Washington model is used for state variables) and the ERC — a panel with executive and legislative members — reviews and adopts the final revenue forecast. The council meets quarterly and posts methods and assumptions publicly.

The prese…