According to a pair of reports released yesterday, the real estate slowdown is still a serious drag on state and local revenues, thanks to significant sagging in real estate excise tax collections.
From the latest state revenue collection report (pdf):
Collections [for the March 11, 2009 – April 10, 2009 collection period] were $8.7 million (17.8%) below the March forecast.
Most of the forecast variance was in the real estate excise tax (REET), which came in $7.9 million (29.4%) below the forecast.
March REET taxable activity reported by the counties is down 47.5% year-over-year.
Meanwhile, the city of Seattle announced a series of cuts (pdf) to attempt to close the rather large budget hole created by flagging excise tax collections. The kicker is on page 8:
If I’m interpreting this document correctly, that’s an over $20 million budget shortfall—almost 30%—entirely due to real estate excise taxes (REET). Ouch.
The good news is now that home prices are approaching reasonable levels again, sales volume is likely to pick up, which will bring excise tax collections up as well.