The significant erosion I've predicted to set in before next March is not happening yet. It is not clear why. Even ChangMook Sohn, chief state forecaster, says "Recent economic news has been positive, but not nearly as good as this month's revenue numbers imply."
Construction is good for the state's coffers and for economic activity, and we're still getting push from that sector. Construction firms tend to be smaller and more independent, which overexposes them to the B&O tax. The real estate excise tax, obviously also connected to construction, was the biggest gainer in the latest report. Construction labor comes in under the retail sales tax.
But let's not overlook the state's notoriously regressive tax structure. We do better when low-paid people do better.
So, yes, I blame the immigrants. If they weren't so damned industrious, and if they'd just stop spending, the dreary days I predict would get here a lot sooner. Them and the minimum wage being at an almost reasonable level. Both these factors increase the multiplier, which is the same as saying you get more economic activity for the same dollar. More sizzle for the buck. But look out, the same dynamic works in reverse, and will exaggerate any decline.
Housing giveth and housing will taketh away. Mortgage rates go up, sales go down. Permits were down 54 percent in the first quarter, and stayed down in the second. Here's the cover of the June forecast.Notice (by the dates at the bottom, which may be fuzzy) that the predicted peak is last quarter. The official forecast calls for a leveling off. I suggest a slide. Not a cliff, but a slope steep enough so we'd better be roped together. That's been my answer for six months and I'm sticking to it.
Still, if I asked nicely, do you think the Guv would issue an edict on gray hair?
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