Spin
Sales tax, B&O tax, and Payroll Expense Tax revenue exceeded prior projections, producing a net gain of roughly $8.8 million over the three-year forecast period.
Budget
October Forecast: Revenue’s Up, Regional Economy’s Down, REET Takes the Hit
At the Oct. 16 meeting, the Office of Economic and Revenue Forecasts (OERF) projected roughly $8.8 million more revenue across 2026-28 than assumed in the proposed budget but described a regional economy with weak employment growth, a construction downturn, declining trade-sector employment, soft demand for tech workers, and a real-estate market that continues to underperform. Seattle Channel OERF Presentation
Revenue forecasts improved by $8.8 million, but REET, construction, and tech hiring point to a weaker regional economy.
The October forecast reveals a growing disconnect between City Hall's revenue outlook and the broader economy. Sales taxes, B&O taxes, and payroll taxes continue to outperform expectations, but OERF says the regional labor market remains weaker than the nation’s, construction remains in a downturn, and total employment is not expected to exceed pre-pandemic levels until 2028. Meanwhile, the City's Real Estate Excise Tax forecast fell by $19.5 million over 2026-28, suggesting that one of Seattle's most economically sensitive revenue streams is telling a very different story than the City's overall revenue outlook. Recent tax increases and tax-base expansions may also be contributing to stronger collections, making it difficult to separate the effects of economic growth from the effects of a broader tax base.
Reality
Seattle's tax revenues are performing better than many of the economic indicators that typically drive them.
KEY STATS
- Revenue forecasts increased by $8.8 million across 2026-28 compared with assumptions in the proposed budget.
- Sales tax obligations grew 11.6% year over year through the first seven months of 2026, aided by the expansion of the taxable base under ESSB 5814.
- OERF projects regional employment will not exceed pre-pandemic levels until 2028.
- Real Estate Excise Tax projections fell by $19.5 million across 2026-28.
- In the pessimistic scenario, the Seattle region loses approximately 58,000 jobs before recovery.
Receipts
- SponsorOffice of Economic and Revenue Forecasts
- CommitteeEconomic and Revenue Forecast Council
- VoteAdoption of October 2026 forecast
Budget documents
The documents behind this brief. Saved PDFs preserve the version we read; original links may change.
Economic and Revenue Forecast October 2026
Office of Economic and Revenue Forecasts
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