>>> GOOD MORNING, EVERYBODY.
GOOD MORNING -- WE ARE HERE ON
AUGUST 5th, 2024. FOR AN AUGUST
ECONOMY AND REVENUE FORECAST
UPDATE PRESENTATION. FOR START,
WITH THIS PRESENTATION, WE --
THE FIRST POINT ON THE AGENDA
WOULD BE TO APPROVE THE
MEETINGS FROM PREVIOUS MEETING.
-- MINUTES FROM PREVIOUS
MEETINGS. APRIL.
>> SO MOVED.
>> SECOND.
>> WE DON'T HAVE DAN STRAUSS
HERE WITH US. OOH. THE VICE
CHAIR IS EXCUSED AND -- AS THE
DESIGNEE -- OF THE VOTE.
>> YES.
>> GOOD MORNING, MY APOLOGIES
FOR BEING LATE. THE SEVENTH
FLOOR AND I STARTED TALKING TO
BARBARA AND -- [ INAUDIBLE ]
THIS MORNING. SO I WILL -- HAND
IT TO YOU AND START THIS
PRESENTATION.
>> FANTASTIC. ONE OF THE FIRST
DAYS THAT I DON'T HAVE TAPE ON
MY TEAM SO I'M NOT SURE
PROBABLY DON'T HAVE A SCRIPT
TODAY BUT THIS IS OPENING OF
AUGUST 5th JOINT FORECAST
COUNCIL MEETING. IN PROGRESS.
THIS TEAM, I'LL PASS IT RIGHT
BACK OVER TO YOU.
>> THANK YOU VERY MUCH. SO THE
FIRST POINT ON THE AGENDA WAS
TO APPROVE THE MEETING MINUTES
FROM APRIL 8th. NOW THAT --
FORECAST COUNCIL DESIGNEE IS
HERE, WE HAVE -- [ INAUDIBLE ]
>> SO MOVED.
>> GREAT.
>> YOU DO CALL FOR A VOTE?
>> GO AHEAD. [ INAUDIBLE ]
>> OKAY. GREAT. AND WE'RE
DOING THIS A LITTLEBIT ON THE
FLY BECAUSE I DON'T HAVE A
WHOLE LIST IN FRONT OF ME.
DIRECTOR?
>> AYE.
>> COUNCIL PRESIDENT?
>> AYE.
>> SUBBING IN FOR CHIEF OF
STAFF ROCK COO.
>> MR. NOLTE.
>> AYE.
>> ARE YOU ON COMMITTEE OR ARE
YOU JOINT?
>> I WAS -- THIS WAS ON MY
CALENDAR. SOMEBODY INVITED ME
TO IT. SO I AM HERE. [ LAUGHTER
]
>> AND --
>> DO I HAVE TO VOTE OR NOT? NO
VOTE? WHAT DID YOU SAY? NO.
GREAT. [ INAUDIBLE ] DO YOU
HAVE SOMETHING TO SHARE?
>> GOOD MORNING.
>> GOOD MORNING. WONDERFUL.
WITH THAT, MOSQUITO MOTION
PASSES ANONYMOUSLY.
>>> SECOND AGENDA ITEM WILL BE
THE UPDATE FOR US.
>> OKAY. SO LET'S GET RIGHT TO
-- ECONOMIC AND REVENUE
FORECAST UPDATE. AUGUST 5th
UPDATE. AS USUAL, WE WILL GO
FIRST OVER AN UPDATE ON THE
RECENT ECONOMIC DEVELOPMENTS
AND PROVIDE SOME SUMMARY OF THE
ECONOMY FORECAST PROPOSAL FOR
THE U.S. AND FOR THE REGIONAL
ECONOMY FOR SEATTLE
METROPOLITAN DIVISION WHICH IS
-- IN THE COUNTIES. AND THEN AS
A SECOND PART OF THE
PRESENTATION, WE ARE GOING TO
LOOK AT THE AUGUST REVENUE
FORECAST. THE FIRST STEP AND
IMPORTANT BECAUSE THOSE
ECONOMIC FORECASTS ARE USED AS
-- IN THE REVENUE FORECAST
MODELS. SO SOME OF THOSE
CHANGES THAT YOU WILL SEE WERE
GIVEN PRIMARILY BY THE CHANGES
IN THE ECONOMY FORECAST -- [
INAUDIBLE ] CHANGES TO THE YEAR
TO DATE ELECTION REV -- REVENUE
COLLECTION. SO FIRST, OF THE
OUTLOOK FOR THE U.S. ECONOMY,
THIS CHART ON THE RIGHT
SUMMARIZES THE MAIN TAKEAWAYS
FROM THE JULY ECONOMIC FORECAST
FOR THE U.S. ECONOMY. OUR
FORECAST OFFICE USES THESE S&P
GLOBAL FORECAST FOR THE U.S.
ECONOMY AS THE MAIN INPUT IN
THE REGIONAL ECONOMIC MODEL AND
SOME OF THE REVENUE FORECASTING
MODELS. AND THE FORECAST FROM
S&P GLOBALS IS SUMMARIZED BY
THOSE RED DOTS IN THE CHART. SO
THERE'S FOUR OF THEM. EACH OF
THEM REPRESENTS THE -- ONE OF
THE MAIN INDICATORS OF THE ONE
ON THE TOP IS A CPI INFLATION
THAT WE -- WHICH S&P GLOBAL
FORECAST TO BE SOMEWHERE AROUND
-- AROUND 2.7% OR SO. FOR THE
FEDERAL FUNDS TRADE, AGAIN, YOU
CAN SEE THAT RED DOT THAT
REPRESENTS DATA FORECASTS FOR
-- THEIR FORECAST FOR THE END
OF THE YEAR FEDERAL FUNDS RATE.
THE REMAINING TWO DOTS ARE FOR
THE UNEMPLOYMENT RATE AND THE
GDP. AGAIN MAIN INDICATORS
SUMMARIZING THE OUTLOOK FOR
2024. IN ADDITION TO S&P
GLOBAL, THERE'S -- MOODY'S
ANALYTICS FORECAST SUMMARIZED
BY THE YELLOW DOT AND THE "WALL
STREET JOURNAL" EDM OF THE
ECONOMIC FORECAST ARE -- IN THE
BLUE DOT. THE REASON WHY WE DO
THIS, WE ARE TRYING TO GET A
SENSE OF HOW OPTIMISTIC OR
PESSIMISTIC THE S&P GLOBAL
FORECAST MIGHT BE RELATIVE TO
WHAT THE OTHER FORECASTERS ARE
SEEING. WHAT THEY ARE EXPECTING
FOR THE YEAR. SO EACH OF THOSE
GRAY DOTS THEN ONE OF THE
FORECASTERS FROM THE --
FORECASTERS 60 GIVE OR TAKE OF
THEM. FOR SOME INDICATORS THERE
MIGHT BE MORE -- YOU CAN SEE
FOR THE GDP QUITE A SPREAD IN
THEIR FORECAST. FOR THE OTHER
ONES THEY ARE MORE CONCENTRATED
FOR FEDERAL FUNDS RATE IS
EITHER ESSENTIALLY JUST THREE
LINES DEPENDING ON HOW MANY
CUTS THEY SEE. THEY CAN PLACE
2010 NOW AND THE END OF THE
YEAR. THE MAIN TAKEAWAY HERE IS
THAT S&P GLOBALS FORECAST THOSE
RED DOTS ARE NOT FAR AWAY
SIGNIFICANTLY DIFFERENT FROM
THE OTHER FORECAST FROM
MOODY'S ANALYTICS AND THE
SURVEY. WHICH GIVES US
CONFIDENCE THAT THEIR FORECAST
REPRESENTS THE GENERAL PERCENT
OF WHERE THE U.S. ECONOMY IS
HEADING FOR THE YEAR. OR TO BE
MORE PRECISE, REPRESENTING WHAT
THE -- GENERAL SENSE WAS IN
JULY '24. ALL RIGHT? AND IT
HAS BEEN SOME RECENT
DEVELOPMENTS. WHICH I WILL
DISCUSS WHICH WE'LL LOOK AT
AND THAT CHANGE THE OUTLOOK A
LITTLE BIT. BUT WHEN THIS FIRST
SURVEY WAS DONE AT THE
BEGINNING OF JULY, THE OVERALL
SENSE WAS THAT THE ECONOMY
ITSELF -- WAS PERMING WELL AND
RECESSION HAD BEEN AVOIDED AND
THE OVERALL RECESSION WENT DOWN
FROM 68% A YEAR AGO TO JUST
28%. SO 12 MONTHS FUTURE LIKELY
THE U.S. WILL BE AT SOME POINT
IN RECESSION WAS JUST 28% AMONG
THEECONOMISTS. AS A POINT OF
REFERENCE, 15% IS A HISTORIC
LEVERAGE SO 28% WOULD BE
ELEVATED SLIGHTLY ELEVATED BUT
AGAIN SIGNIFICANTLY BELOW THE
60% WHO OVER THE
SESSIONFORESEEN A YEAR AGO.
>> JUST TO -- 60% WHEN?
>> FOR A WHILE, ESSENTIALLY UP
ON -- WHEN INFLATION STARTED
COMING DOWN AT THE END OF 20
IN. A YEAR AGO WHEN WE WERE
PREDICTING THIS FORECAST, IT
WAS -- ABOUT 60% OF THE U.S.
ENTERING A RECESSION -- BETWEEN
AUGUST -- OR JULY '23 AND JULY
'24.
>> OKAY. AND I KNOW JUST IN THE
LAST COUPLE OF YEARS, WE'VE
BEEN -- THE FED MEETING WHERE
THEY DECIDED NOT TO LOWER
INTEREST RATES AND THE STOCK
MARKET KIND OF DID A DOOZY.
DOES THAT CHANGE THE RATING
TODAY? SORRY.
>> THAT'S A VERY GOOD POINT
AND EXACTLY WHERE WE ARE NOW
AND WHAT WE'RE DEALING WITH
AND I WILL GET THERE IN JUST A
MINUTE. SO -- LOOKING BACK,
LITTLE BIT MORE AT ARCH
FORECAST FOR THE U.S. NOW
FOCUSING ON THE S&P GLOBALS
FORECAST ONLY. AGAIN THAT'S A
MAIN OUT AND INPUT FOR OUR
FORECAST IS RED LINE SHOWING
S&P GLOBALS EXPECTATION
REGARDING THE FEDERAL INTEREST
RATE. SO THEY WERE EXPECTING
FEDERAL FUNDS -- TO GO DOWN AND
FEDERAL -- FEDS STARTED CUTTING
THE INTEREST RATE IN GENERAL
SENSE THERE WOULD BE A COUPLE
OF CUTS AND YOU MIGHT -- GO TO
5% BY YEAR'S END. THERE HAS
BEEN A SERIES OF PROJECT --
RATHER DISAPPOINTING INFLATION
READINGS IN THE FIRST HALF OF
THE YEAR. WHICH LED THE FED TO
MORE CAUTIOUS APPROACH TO THE
CUTS AND THEY DELAYED RATE CUTS
AND AS A RESULT, THAT REVISED
FORECAST S&P GLOBAL RELEASED
MIDDLE OF JULY, HAS SHOWN ME
THIS RED LINE AND EXPECTS RATES
TO STAY HIGHER FOR A LITTLE BIT
LONGER BEFORE THAT WILL START
CUTTING THE INTEREST RATE AND
THE ASSUMPTION WILL HAVE
INTEREST STUFF BE LOWER IN THE
END OF THE YEAR IN DECEMBER ON.
FED HAS MET RECENTLY, LAST
WEEK. AND IF THEIR INTEREST
RATE UNCHANGED BETWEEN NOW AND
THE END OF THE YEAR THEY WILL
BE MEETING THREE MORE TIMES.
THE NEXT MEETING IS IN
SEPTEMBER. AND SINCE THAT
MEETING LAST WEDNESDAY, THERE
HAS BEEN A SITUATION --
EMPLOYMENT SITUATION REPORTS
RELEASED ON FRIDAY. WHICH
SHOWED THAT IN GENERAL, WEAKER
THAN EXPECTED JOB CREATION AND
HIGHER UNEMPLOYMENT RATE AND
THAT WAS HOLLOWED BY A COUPLE
OF UNEXPECTED OUTLOOKS FOR
EARNINGS OF SOME MAIN MAJOR
COMPANIES. IT WAS FOLLOWED BY A
REPORT ON JOB OPENINGS WHICH --
AND HIGHER WHICH WAS AGAIN
WEAKER THAN ANTICIPATED. SO ALL
THAT LED TO THEN TO
SPECULATIONS VERY RECENTLY AND
LAST WEEK IT WAS WHY -- QUITE
EVENTFUL. SO THERE HAVE BEEN
SOME SPECULATIONS AFTER THAT
THE REPORT WAS RELEASED ON
FRIDAY THAT IT'S KIND OF
BEHIND ON THE -- INTEREST RATE
CUTS ON -- CALCULATIONS THAT
ACTUALLY HAVE TO MOVE FASTER TO
AVOID A HARD LANDING. AND AS OF
THIS MORNING, THE FINANCIAL
MARKETS ARE PUTTING THE
PROBABILITY OF A RATHER LARGE
PERCENT CUT AT 9.15% IN
SEPTEMBER AND THAT'S UP FROM
ABOUT 74% CHANCE JUST A FEW
DAYS AGO FOR THAT EMPLOYMENT
SITUATION REPORT WAS RELEASED.
SO AGAIN, THERE'S GENERAL
SENSE OF CONCERN THAT THE LABOR
MARKET IS WEAKENING AND IT'S
WEAKENING MAYBE FASTER THAN
WHAT WOULD BE IDEAL AND IF THE
FED DOESN'T START CUTTING THE
RATES FAST WE MIGHT BE HEADING
IN FOR A HARD LANDING AND
RECESSION. SO -- THAT --
RECESSION OUTLOOK IS THIS PART
OF WHAT -- S&P GLOBAL INCLUDES
IN THEIR JULY PESSIMISTIC
SCENARIO AS YOU CAN SEE
INTEREST RATES ARE COMING DOWN
FAST BECAUSE OF THE SIGNIFICANT
SOFTENING IN THE LABOR MARKET
AND SIGNIFICANT JOB LOSSES
WHICH THE THEN TRIED TO KIND OF
AVOID BY CUTTING AGGRESSIVELY.
MAYBE NOT UP EARLY -- AGAIN
THERE'S SOME CONCERNS ABOUT
THE ECONOMIES TO WHAT EXTENT
THE INTEREST RATES ARE COMING
MAYBE A LIT TOO LATE AND IF
TODAY THE "WALL STREET JOURNAL"
OFFERED 30% OR -- 40%
PROBABILITY -- [ INAUDIBLE ] WE
PROVIDES SLIGHTLY HIGHER ANSWER
INSTEAD OF 28%. WE LOOK MORE
LIKELY SEE SOMETHING UPWARDS OF
33%. 35%, 40% PROBABLY BE -- BY
A SENSE OF AGAIN, SOME OF THOSE
-- THOSE NEWS THAT -- THE
REPORT AND SOME OF THE OPINIONS
OF THE ECONOMISTS HAVE BEEN
ASKED THERE.
>> THE 35% CHANCE OF RECESSION,
IS THAT JUST THE -- "WALL
STREET JOURNAL'S" LATEST OR IS
THAT YOURS?
>> THAT WILL BE THE SECOND ONE.
YES. THE LITTLE --
>> WHAT WOULD BE ONE?
>> MY SENSE OF WHAT I HAVE
HEARD AND A COUPLE OF
ECONOMISTS THAT WE ARE
FOLLOWING THE TRUST -- THEIR
SENSE IS THAT THE LIKELIHOOD OF
A RECESSION IS GOING UP. WE ARE
NOT IN A RECESSION YET. BUT
IT'S DEFINITELY -- DEFINITELY
SOME REASONS TO BE CONCERNED.
THE LIKELIHOOD OF A RECESSION
IS HIGHER. AGAIN, NOT 60% AS
LAST NUMBER. NOT AS LOW AS FEW
WEEKS AGO BEFORE THE BIG
UNEMPLOYMENT REPORT. AND YES.
LOOKING -- IF YOU ARE WATCHING
THAT VERY CLOSELY. DEPENDING ON
HOW FAST THOSE RATES ARE COMING
IN A RECESSION WOULD PROBABLY
BE A -- [ INAUDIBLE ]
>> SO MORE BETWEEN 28% AND 60%.
>> WELL, YEAH. AGAIN, 60% WAS
HIGHLY ELEVATED CHANCE OF A
RECESSION LAST YEAR AS THINGS
WERE LOOKING RATHER BLEAK.
SINCE THEN THE U.S. ECONOMY HAS
SHOWN QUITE STRONG PERFORMANCE
FOR LABOR MARKET AND THE FIRST
QUARTER ESTIMATES JUST SAME IN
REALLY STRONG. IT'S NOT GOING
TO BE 60% BUT THE NEXT 30 -- OF
THINGS ARE GOING TO BE WELL --
NOT AS BLEAK AS WE SAW AT THE
BEGINNING OF JULY. SO OVERALL
BALANCE IS PRETTY COMFORTABLE
TOWARDS -- [ INAUDIBLE ]
>> OKAY.
>> OKAY. THANK YOU. ALL RIGHT.
SO LOOKING AT THE LABOR MARKET,
AGAIN, WHAT THE -- INPUT FOR
THE MODELS WAS PACKING WHEN WE
WERE DEVELOPING THE APRIL
FORECAST, SHOWN BY THIS RED
LINE. S S&P GLOBAL WAS
ANTICIPATING A SLOWDOWN IN JOB
CREATION AND FEWER JOBS CREATED
AND FEWER -- LOWER EMPLOYMENT
CROWDS. THAT -- STRONG
PERFORMANCE OF A LABOR MARKET
AND THE FACT THAT OUTPERFORMED
EXPECTATIONS CAN BE SEEN HERE
AGAIN AND CHANGE BETWEEN THE
LINE AND THE RED LINE. THE
EXPECTATION REGARDING THE
EMPLOYMENT ROSE IN MID-JULY
FORECASTS ARE ABOVE MARCH
FORECASTS AND AGAIN, THAT WAS
THE FORECAST S&P GLOBAL
FORECAST DEVELOPED BEFORE THE
-- BEFORE THAT WAS RELEASED ON
FRIDAY. SO. DO -- THAT SLOWDOWN
IN THE JOB CROWDS CURRENTLY AT
1.6% YEAR OVER YEAR. THE
UNEMPLOYMENT RATE ROSE TO 4.3%
AND AGAIN -- NOT TAKING INTO
ACCOUNT THIS JULY FORECAST.
SOMETHING THAT S&P GLOBAL IS
BUILDING TO THEIR NEXT
FORECAST. THE DEVELOPMENT.
OVERALL OUTLOOK FOR THE REST OF
THE YEAR LOOKING -- RED LINE
DOWN. OR CURRENTLY -- END OR
THE LIKELIHOOD OF THE RECESSION
PROBABLY LIKELIHOOD OF --
FOLLOWING THE THREAD FAST AND A
SCENARIO WHERE DARK BROWN
PESSIMISTIC SCENARIO AND IT
SHOULD -- WARN US THAT --
>> BEFORE YOU MOVE ON, I HAVE
BEEN TOLD THAT IT'S HARD TO
HEAR ME ON THE COMPUTER.
THAT'S WHY I'M SPEAKING
LOUDLY. I'M NOT YELLING AT
HIM. IN EACH OF THESE SCENARIOS
WHERE YOU ARE PRESENTING THE
PESSIMISTIC, THAT'S ALL BASED
ON IF WE HIT A RECESSION. IF WE
HIT A RECESSION, WE'RE GOING
TO BE -- LOSE JOBS I'M
ASSUMING.
>> ESSENTIALLY WHAT THE CHART
IS SHOWING. SO IN GENERAL,
PESSIMISTIC SCENARIOS DON'T
NECESSARILY HAVE A MEAN A
RECESSION. THIS PARTICULAR CASE
IN THIS PARTICULAR FORECAST IT
IS A RECESSION AND YOU CAN SEE
THAT BY THE FACT THAT
PESSIMISTIC SCENARIO LINE
CROSSES BELOW THE ARROW WHICH
MEANS YEAR OVER YEAR LOSSES IN
EMPLOYMENT. I BELIEVE IT GOES
HOW FAST IT GOES AND TELLS YOU
HOW PEOPLE -- RECESSION AND HOW
SEVERE OF A RECESSION. THIS ONE
-- IT WOULD BE THIS ONE IN
PARTICULAR WOULD IMPLY AT THE
PEAK ABOUT 1.5% YEAR OVER YEAR
JOB LOSSES. WHICH IS
CONSIDERABLE AND IT'S NOT THE
BEST RECESSION AND IT WILL NOT
BE THE DEEPEST RECESSION, BUT
IT IS -- MAYBE IT CAN HAVE A
SIGNIFICANT IMPACT ON -- [
INAUDIBLE ]
>> THANK YOU. YOU ARE THE JULY
2024 BASELINE IS INDICATING A
HIGHER LEVEL OF EMPLOYMENT THAN
MARCH 2024 BASELINE.
>> YES. THAT'S CORRECT.
THAT'S -- BEEN THE RESULT OF
STRONG PERFORMANCE OF THE U.S.
LABOR MARKET WHICH UP TO THE
VERY LAST REPORT, IN
GENERAL -- TALKING ABOUT -- [
INAUDIBLE ]
>> GREAT. THANK YOU.
>> ALL RIGHT. NOW LOOKING AT
THE REGIONAL ECONOMY SO MOVING
FROM THE U.S. LABOR MARKET TO
THE REGIONAL LABOR MARKET,
THERE ARE AGAIN COUPLE OF
THINGS THAT WE ARE SEEING THAT
ARE CONCERNING. FIRST, THE FALL
-- THERE HAS BEEN A SCHOOLING
OF LATE LABOR MARKET IN THE
U.S. AND THE REGIONAL ECONOMY
IS GOING TOWARDS -- NOT GOING
AT THE SAME SPEED. THE U.S.
LABOR MARKET AGAIN, SLOW DOWN
THE COOLING OF WAS MUCH FASTER
IN THE REGIONAL ECONOMY. THE
CHART HERE SHOWS THE JOB
POSTINGS AND HOW MANY JOBS
OPENED AND PRESUMABLY HIRING
BASED ON THE DATA FROM INDEED.
INDEED PUBLISHES INDEX THAT
COMPARES -- ALLOWS US TO
COMPARE DIFFERENT REGIONS AND
DIFFERENT PARTS OF THE U.S. AND
OVER TIME. AND WHAT THIS CHART
HERE IS SHOWING THAT THE
OVERALL AMOUNT OF HIRING THAT
THOSE JOBPOSTINGS FOR THE U.S.
AS A WHOLE ARE NOW ABOVE
PRE-PANDEMIC LEVELS. SO BLUE
LINE IS NOW SOMEWHERE AROUND
10% TO 15%. AND -- SO MORE OF
OPENINGS AND -- BEFORE THE
PANDEMIC HIT. FOR THE RED LINE,
THAT'S A SEATTLE REGIONAL
LABOR MARKET WHICH AGAIN
INCLUDES THREE COUNTIES. THE
STATISTICAL AREA. THE REGION AS
A WHOLE THE NUMBER OF JOB
OPENINGS IS MORE THAN 20% LOWER
THAN IN THE PRE-PANDEMIC. RIGHT
BEFORE THE PANDEMIC. WHAT WE'RE
SEEING IS THAT THE RED AND BLUE
LINES ARE CLOSES COMING DOWN
AGAIN BUT THE GAP BETWEEN THEM
IS OPENING. AGAIN THE COOLING
OF THE REGIONAL LABOR MARKET
MUCH FASTER. COMPARED TO THE
U.S. ONE. THAT IS -- OPENING --
IT'S NOT -- NOT OPENING MORE
WIDER RECENTLY. BUT NOT CLOSING
EITHER. AGAIN, COMPARED TO
PRE-PANDEMIC -- [ INAUDIBLE ]
IT'S WORSE IN TERMS OF THE JOB
OPENINGS. ANYTHING TO THAT, THE
OTHER INDICATOR THAT SHOWS
WEAKER LABOR MARKET IN THE
REGION COMPARED TO THE U.S. IS
THE UNEMPLOYMENT RATE.
TRADITIONALDY THE UNEMPLOYMENT
RATE IN THE SEATTLE AREA HAS
BEEN LOWER THAN IN THE U.S.
THERE HAS BEEN A REVERSAL IN
THE LAST COUPLE OF MONTHS FROM
STARTING FROM MARCH WE ARE
SEEING UNEMPLOYMENT RATE IN THE
REGION WHICH IS ABOVE THE U.S.
UNEMPLOYMENT RATE. BOTH OF THEM
ARE TRENDING UP. SO.
UNEMPLOYMENT RATE IS RIGHT NOW
2.2 -- 0.2% HIGHER IN THE
REGION COMPARED TO THE U.S.
LAST INDICATOR AND THAT IS
PROBABLY THE MORE -- MOST
IMPORTANT ONE IN TERMS OF THE
IMPACT ON THE REVENUE FORECAST,
ARE NUMBER OF JOBS. THE
EMPLOYMENT IN THE SEATTLE AREA.
THE JOB NUMBERS, AND NUMBER OF
JOBS THAT WE ARE USING IN THE
FORECASTING MODEL, ARE COMING
FROM WASHINGTON STATE
EMPLOYMENT SECURITY DEPARTMENT.
THEY ARE RELEASING A REPORT
EVERY MONTH WITH THEIR
ESTIMATES OF THE OVERALL
EMPLOYMENT BY REGION, BY
INDUSTRY. AND THE LINE HERE IN
THE CHART SHOWS THEIR MARCH
ESTIMATES FOR YEAR OVER YEAR
JOB POSTS AND EMPLOYMENT AS
MEASURED NOT IN NECESSARILY OF
INDIVIDUALS, BUT OF COMPANIES
WHICH ARE ESSENTIALLY RECORDING
HOW MANY JOBS THEY HAVE AND
PEOPLE MIGHT HAVE MULTIPLE
JOBS. SO EMPLOYMENT IN TERMS OF
THE NUMBER OF JOBS AND ITS
CHANGE YEAR OVER YEAR. WHAT THE
CHART SHOWS IS THAT BACK IN
MARCH, '24, THEIR ESTIMATE WAS
THE OVERALL EMPLOYMENT IS
GROWING SOMEWHERE AROUND 1.3%
OF FEWER -- OR AROUND 1.5%. NOW
-- THESE ESTIMATES HAVE BEEN
REVISED DOWN AND THAT IS -- I
THINK THAT THAT HAPPENS
REGULARLY AND THERE ARE
REVISIONS TO THE OFFICIAL
NUMBERS. MORE INFORMATION THAT
THEY ASSESS AND THEY
OCCASIONALLY REVISE THEIR
EMPLOYMENT ESTIMATES DOWN. THEY
HAVE REVISED IT UP. WHAT WE
HAVE SEEN IN RECENT PAST ARE A
SERIES OF DOWNLOAD REVISIONS
AND THE VERY LAST ONE SHOWN
YEAR BY THAT RED LINE AND SHOWS
YOUR JULY REPORT ESTIMATES.
THAT THAT ONE BROUGHT THE
EMPLOYMENT ROSE IN LAST 12
MONTHS TO 0.3% YEAR OVER YEAR.
SIGNIFICANTLY LESS EMPLOYMENT
ROSE THAN WHAT WAS EXPECTED
WITH THOSE -- WHAT WE WERE
BELIEVING BASED ON THOSE --
BASED ON THIS REPORT IN MARCH.
SO ROUGHLY 1% LESS --
UNEMPLOYMENT ROSE BARELY ABOUT
--
>> SO JUST SO I'M CLEAR, THE
MARK ONE -- AND THEN DO THEY
TYPICALLY RELEASE THESE ON A
CERTAIN SEQUENCE OR ARE THEY
RELEASING THEM MORE THAN THEY
TYPICALLY DO? WHICH IS WHAT
WE'RE NOW SEEING KIND OF.
>> THEY ARE --
>> RESULT OF THEIR --
>> THEY ARE RELEASING THEM
EVERY MONTH. SO WE ARE --
SHOWING HERE ONLY THE MARCH AND
THE JULY REPORTS. BECAUSE MARCH
WAS -- INPUT FOR THE APRIL
REVENUE FORECAST. AND JULY IS
THE BEST --
>> SO IN-BETWEEN MARCH AND JULY
WERE YOU SEEING THEM REVISE
THIS DOWN? AS DRAMATICALLY AS
IT IS.
>> AS DRAMATICALLY? THIS IS OUR
THREE MONTHS SO EVERY QUARTER
THERE IS A EVENTUALLY A LARGE
REVISION. EVEN THE WAY HOW --
DATA IS COLLECTED EVERY QUARTER
THERE'S A LARGE AMOUNT OF
ADDITIONAL INFORMATION
PROCESSED AND EVERY THREE
MONTHS THERE'S EVENTUALLY A
LARGE REVISION. IN-BETWEEN
THOSE RELEASES THE REVISION IS
USUALLY MUCH SMALLER.
>> OKAY, WASN'T REALLY AN
INDICATION UNTIL THEN.
>> NO. SO -- IF WE WERE TO GO
BACK BEFORE MARCH 2024, LIKE I
SAID, THERE WERE A COUPLE OF
AGAIN, SIGNIFICANT RELEASES AND
SIGNIFICANT REVISIONS AND THEY
WERE -- [ INAUDIBLE ]
>> WOULD THE NATIONAL TREND
LOOK SIMILAR?
>> IN TERMS OF REVISIONS OR --
>> YEAH. IF THERE'S A BLUE
LINE ON THIS BECAUSE IF JOB
POSTINGS ARE LOWER THAN
PRE-PANDEMIC, COMPARED TO THE
U.S. WHICH THEY'RE ABOVE, THAT
WAS THE SLIDE BEFORE. AND
UNEMPLOYMENT IS GOING UP FASTER
HERE THAN ELSEWHERE. WHAT WOULD
-- JOB GROWTH LOOK LIKE ON THIS
CHART?
>> RIGHT. VERY GOOD QUESTION.
>> BY COMPARISON.
>> THAT'S A VERY GOOD QUESTION
AND THAT'S WHAT THE CHART WILL
TRY TO ADDRESS. SO THE BLUE
LINES WILL NOW SHOW THE UNITED
STATES. AGAIN, LOOKING AT MARCH
VERSUS JULY. ESTIMATES FOR
EMPLOYMENT ROSE IN THAT
GEOGRAPHICAL AREA, FOR THE
UNITED STATES AS A WHOLE, THAT
SLOWDOWN IN LABOR MARKET
REPRESENT -- IS REPRESENTED
HERE BY THE FACT THAT THE BLUE
LINE IS TRENDING DOWN. THERE
ARE FEWER JOB OPENINGS. SLOWER
EMPLOYMENT ROSE AND TRENDING
TOWARDS -- THAT OF THE LABOR
MARKET THAT I WAS TALKING ABOUT
IS REPRESENTED HERE BY THE FACT
THAT THE LINE HAS MOVED UP AND
THAT -- IN THE PERIOD BETWEEN
MARCH AND JULY FOR THE U.S., IF
WE ADD SEATTLE AREA TO THE
CHART AND THOSE TWO RED LINES
FROM A PREVIOUS CHART, HERE'S
WHAT WE GET. SO NOW THESE CHART
SHOW NOT JUST HISTORICAL DATA
UP UNTIL JULY 2024, BUT IT
INCLUDES FORECASTS. SO THIS IS
A SUMMARY OF THE U.S. NATIONAL
FORECAST FROM S&P GLOBAL AND
OUR FORECAST FOR SEATTLE
REGIONAL LABOR MARKET.
>> WELL. --
>> THOSE REVISIONS ARE
ESSENTIALLY GOING IN THE
OPPOSITE DIRECTION. WHEREAS THE
U.S. EMPLOYMENT FORECAST HAD
BEEN REVISED UP, AGAIN, AS OF
JULY MID-JULY, BECAUSE LAST --
THE REPORT IS NOT BUILT INTO
THE FORECAST. AND SIMILARLY,
THE ONLY THING THAT WE HAVE
THIS -- CHART FOR SEATTLE AREA
IS THE REPORT FROM MID-JULY FOR
SEATTLE. SO LIKE -- LOWER THAN
THE JULY EMPLOYMENT VERSUS OURS
FOR SEATTLE AND ALREADY
PUBLISHED FOR THE U.S. AND THEY
HAVE BEEN [ INAUDIBLE ] YES.
QUESTION?
>> IT SAYS THE SEATTLE AREA IS
EXPECTED TO LAG. BUT I SEE
EMPLOYMENT GROWTH IN THE
SEATTLE CHART ABOVE WASHINGTON
STATE AND THE NATION, AM I
READING THIS WRONG?
>> YEAH. RIGHT. SO THAT'S --
THAT'S A CORRECT OBSERVATION.
SO WHAT THESE CHARTS ARE SAYING
ESSENTIALLY IS THAT THROUGHOUT
2024 ALMOST ALL THE WAY TO THE
END OF THE YEAR, THE JOB GROWTH
WE WILL BE LOWER IN THE SEATTLE
AREA. BUT WE WILL BE CATCHING
UP. IT'S -- THE RESULT OF SOME
TRENDS WHICH ARE DIFFERENT IN
SEATTLE AREA COMPARED TO THE
U.S. THE -- LEISURE AND
HOSPITALITY SECTOR IS EXPECTED
TO PERFORM QUITE STRONGLY. THE
MANUFACTURING SECTOR HAS SEEN
SOME -- SOME SETBACKS BUT AGAIN
IN GENERAL, TRAJECTORY FOR
MANUFACTURING SECTOR IS
STRONGER GROWTH THAN WHERE WE
ARE RIGHT NOW. FOR PROFESSIONAL
BUSINESS SERVICES, THE
INFORMATION SECTOR, THERE ARE
-- THERE ARE REASONS TO BELIEVE
THAT JOB LOSSES THAT WERE IN
THIS SECTOR MAJOR TECH
COMPANIES WERE LAYING OFF. THAT
THERE ARE INDICATORS THAT THE
WORST IS OVER AND THAT --
STRONG GROWTH THAT WE HAVE SEEN
IN THE PAST FOR PROFESSIONAL
BUSINESS SERVICES, FOR
INFORMATION SECTOR, AND KIND OF
RESUMING AND BRING THE JOB
GROWTH BACK ABOVE THE U.S.
LEVEL EVENTUALLY. JUST -- LATER
THAN WE WERE EXPECTING BEFORE.
BACK IN APRIL IT WAS SMALLER
THAN WE WERE EXPECTING. THE
OTHER -- THE OTHER FACTOR HERE
IS THAT WITH THE INTEREST RATE
CUTS THAT WERE ANTICIPATED BACK
IN THE BEGINNING OF JULY, LOWER
INTEREST RATES WOULD BE A HELP.
STIMULATE NATIONAL ECONOMY. FOR
THE OUTPUT FOR OUR REGIONAL
ECONOMY EVEN MORE GIVEN THE --
[ INAUDIBLE ] SIGNIFICANT DATA.
BUT YEAH. THIS -- THE MISTAKE
OF IT HERE WOULD BE THAT JOB
GROWTH FOR 2024 FOR SEATTLE
REGIONAL MARKET IS 0.7%. FOR
WASHINGTON STATE, 1.3%. FOR THE
U.S. 1.6%. SO REGIONAL
EMPLOYMENT ARE SIGNIFICANTLY
SLOWER THAN THE UNITED STATES.
AT THE NATIONAL LEVEL. VERY
QUICKLY HERE. IF A RECESSION
WERE TO HAPPEN, IF THE U.S.
ECONOMY WERE TO FOLLOW THE
TRAJECTORY, YOU KNOW, COUPLE OF
SLIDES BEFORE FOR THE
EMPLOYMENT, WHERE THE RECESSION
OCCURS AND THERE ARE JOB LOSSES
IN THE U.S., THERE WOULD BE
SIGNIFICANT AMOUNT OF JOB
LOSSES ALSO IN SEATTLE AREA.
COMPARED TO -- COMPARED TO THE
CURRENT LEVEL OF EMPLOYMENT AT
THE BOTTOM IT WOULD BE ABOUT
2.5% FEWER JOBS COMPARING THE
BASELINE AND THE BEST POSE
MYSTIC SCENARIO WOULD MEAN THAT
COMPARISON SHOWS IT WOULD BE
ABOUT 5% FEWER JOBS. AGAIN,
SIGNIFICANT AMOUNT OF JOB
LOSSES IN THE REGIONAL ECONOMY
IF A RECESSION OCCURRED.
>> I HAVE A QUESTION ABOUT THIS
SLIDE. BUT ANY SLIDE THAT HAS
THE POSE MYSTICS SCENARIO. GOT
A BASELINE WHICH HAS BEEN
UPDATED. AND A PESSIMISTIC
LOOK. IS THERE AN OPTIMISTIC
LOOK THE BASELINE IS IN THE
MIDDLE OF AND I GUESS I'M
TRYING TO FIGURE OUT HOW
SERIOUSLY OR HOW WORRIED WE
SHOULD BE ABOUT THE PESSIMISTIC
SCENARIO VERSUS THE BASELINE IF
THE BASELINE IS SOMETHING
IN-BETWEEN PESSIMISTIC AND
OPTIMISTIC.
>> RIGHT. YES. SO THERE'S AN
OPTIMISTIC SEA YOUR AND WE
TYPICALLY DON'T PRESENT IT. IT
IS NOT SOMETHING THAT WE CAN
REVIEW ON AND WE CAN PROVIDE
INFORMATION ON THAT. THE
MONTHLY REPORT THAT WE ARE
SENDING FOR NATIONAL FORECAST
UPDATES INCLUDE THAT OPTIMISTIC
SCENARIO, BUT LIKE -- ALL THOSE
EXTRA LINES. THAT SAID, AS YOU
CAN SEE AT THE VERY TOP THE
FIRST BULLET POINT. THERE'S
55% CHANCE OF BASELINE SCENARIO
AND A 25% CHANCE OF A
PESSIMISTIC SCENARIO. THAT
MEANS S&P BELIEVES THAT IT'S
MORE TOWARDS THE DOWNSIDE AND
THAT'S -- AGAIN, GIVEN THE
RECENT DEVELOPMENTS THAT IS THE
ONE THAT WE ARE MORE --
UNCERTAIN ABOUT. WE MIGHT END
UP CLOSER TO RATHER THAN
OPTIMISTIC SCENARIO WHICH RIGHT
NOW HAS 20% CHANCE ASSIGNED TO
IT AND IT'S 5% HIGHER COMPARED
TO MARCH. GIVEN LAST COUPLE OF
MONTHS BEING IN GENERAL. GOOD.
LABOR MARKET IN TERMS OF GDP
GROWTH. THE OPTIMISTIC SCENARIO
IS SLIGHTLY HIGHER THAN THE
BASELINE. BUT IT'S -- AGAIN,
BETWEEN THE BASELINE AND
OPTIMISTIC YOU HAVE THE LARGEST
-- BEING THE BASELINE AND
PESSIMISTIC. SO AGAIN, BALANCE
OF RISK IS TOWARDS DOWNSIDE AND
-- [ INAUDIBLE ] IT WOULD BE
THE OUTCOME THAT -- SORRY. BUT
AGAIN, SUMMARIZE, WE DO HAVE IN
OPTIMISTIC SCENARIO AND WE DO
DEVELOP THREE FORECASTS FOR
REVENUE THROUGH SCENARIOS AND
AND WE'LL LOOK AT THAT AFTER
WE MOVE ON TO THE REVENUE.
>> OKAY.
>> ALL RIGHT. FEW MORE THINGS
ON THE REGIONAL LABOR MARKET.
IN TERMS OF RETURN TO THE
OFFICE AND TRENDS THERE, WE ARE
NOT SEEING SIGNIFICANTLY
DIFFERENT THINGS COMPARED TO
THE APRIL. IN CENTRAL BUSINESS
DISTRICT, THERE'S PRETTY MUCH
NO IMPROVEMENT STARTING FROM
2023 AND HOVERING SOMEWHERE
AROUND 50%. OR SOUTH LAKE UNION
AND BELLTOWN NEIGHBORHOODS, THE
TREND IS IN GENERAL GOING UP.
IMPROVEMENT IN TERMS OF THE
EMPLOYEES PRESENT AT WORKPLACE.
AND AT HOME AND OTHER TECH
COMPANIES HAVE PUSHED TOWARDS
WITH THEIR EMPLOYEES CURRENTLY
IN THE OFFICE -- SO THAT'S
CERTAINLY GOOD NEWS. NOW
RELATED TO THAT, DEVELOPMENT IN
OFFICE VACANCY RATES AGAIN,
SOMETHING THAT LEAVES US
WORRIED AND RECENTLY RELEASED
REPORT ON THE DEMAND FOR OFFICE
SPACE. THERE'S A -- PLATFORM
THAT PROVIDES QUARTERLY UPDATES
TO THE INDEX AS THEY CONSTRUCT
SUMMARIZING THE DEMAND FOR
OFFICE SPACE AND THEY DO IT FOR
U.S. AS A WHOLE AND ALSO FOR
COUPLE OF LARGE CITIES ON THE
WEST COAST. IT'S SEATTLE, LOS
ANGELES, AND SAN FRANCISCO.
THEN ON THE EAST COAST, IT'S
NEW YORK, WASHINGTON, BOSTON.
AND THE REPORT ALSO INCLUDES
CHICAGO. SO AMONG THOSE CITIES
DEMAND FOR OFFICE --
PRE-PANDEMIC WARM WAS THE
LOWEST IN SEATTLE. SO THE
DEMAND RIGHT NOW SITS AT 47% OF
WHAT IT WAS RIGHT BEFORE -- 37%
RIGHT NOW COMPARED TO WHAT IT
WAS BEFORE -- BEFORE PANDEMIC
AND TWO YEARS BEFORE PANDEMIC.
AND IT'S A -- DOWN FROM 47%
LAST QUARTER AND LESS DEMAND
FOR OFFICE SPACE. SEATTLE IS --
ONE OF THE CITIES WITH LOWEST
INDEX SUMMARIZES THE DEMAND FOR
OFFICE SPACE FOR U.S. AS A
WHOLE IS 62%. COMPARED TO 65%.
>> DO YOU HAVE ANY IDEA WHY?
>> WE DO HAVE SOME IDEAS WHY.
IT'S -- ESSENTIALLY THE FACT
THAT THE COMPANIES ARE STILL
REEVALUATING THEIR DEMAND FOR
OFFICE SPACE. THEY ARE TRYING
TO FIGURE OUT WHAT TO SPEND --
THEY NEED THE OFFICE SPACE THAT
THEY HAVE AND WHERE EXACTLY
THAT OFFICE SPACE IN THE REGION
OR U.S. AS A WHOLE SHOULD BE.
WHAT MATTERS QUITE A LOT IS THE
COMPOSITION, THE INDUSTRY
COMPOSITION OF THE JOBS. SOME
OF THEM ARE MORE -- FOR SOME OF
THEM REMOTE WORK IS JUST
EASIER. AND SEATTLE HAPPENS TO
BE ONE OF THE CITIES WHERE THE
SHARE OF THOSE JOBS WHICH CAN
BE DONE REMOTELY IS LARGER
COMPARED TO OTHER CITIES THERE.
AND IN GENERAL, IN THAT SAMPLE
IN THE -- GROUP OF CITIES,
THOSE WITH LARGER SHARE OF JOBS
THAT CAN BE PERFORMED RE MOTELY
ARE PERFORMING WORSE COMPARED
TO THE NATION AS A WHOLE. SAN
FRANCISCO IS VERY CLOSE TO
SEATTLE IN TERMS OF -- THE
CURRENT DEMAND AND OFTEN THE
TRADE -- FOR ONE OF THOSE AT
THE VERY BOTTOM. WE HAVE BOSTON
AGAIN BECAUSE OF THE LARGE
SHARE OF WORKING REMOTELY AND
COMPANIES STILL -- FIGURING OUT
EXACT NEEDS FOR OFFICE SPACE.
>> OKAY.
>> SO THAT ALSO TRANSLATES TO
THE OUTLOOK FOR OFFICE VACANCY
RATES. THAT ONE IS COMING FROM
CO-STAR. AND CO-STAR UPDATES
THEIR FORECAST FOR OFFICE
VACANCY RATES REGULARLY AND WE
ARE USING THAT AS AN INPUT FOR
OUR REGIONAL FORECAST AND FOR
THE FORECAST FOR WE BELIEVE
THAT THEY ARE IN THE IMPORTANT
FACTOR. BASED ON WHAT WE HAVE
SEEN BEST BASED ON THOSE
STATISTICAL ANALYSES THAT WERE
PERFORMED. THE OFFICE VACANCY
RATES AND THEY ARE HIGH THEY
GENERALLY IMPLY LOWER SALES TAX
AND PAYROLL TAX AND ACROSS THE
BOARD PRETTY MUCH ALL THE MAIN
-- REVENUES ARE ONE WAY OR THE
OTHER. AND SMALLER OR LARGER
EXTENT, THE FACT THAT YOU CAN
BUY HIGH OFFICE VACANCY RATES
-- SO AGAIN, THOSE BLUE AND RED
LINES COMPARE U.S. AS A WHOLE
AND SEATTLE AREA. THE DOTTED
LINE IS WHERE WE ARE RIGHT NOW.
AND TO THE RIGHT OF THAT IS THE
OUTLOOK WHICH IS FOR OFFICE
VACANCY RATES TO CONTINUE TO
DECLINE. CONTINUE TO CLIMB
SIGNIFICANTLY. IN THE SEATTLE
AREA. THERE'S LARGE AMOUNTS --
THE EASIEST WILL BE EXPIRING
AND THOSE THAT ARE NOT RENEWED
WILL ADD THE OFFICE VACANCY
RATES WHICH ARE THEN GOING TO
COME DOWN ON US VERY SLOWLY.
YOU KNOW, AGAIN, THEY'RE LOW
-- SIGNIFICANTLY LOWER THAN THE
OFFICE SPACE. NOW IN ADDITION
TO THAT, ONE FINAL POINT HERE
IS THAT DIRECTION WHERE --
WHICH RED LINES CHANGE
COMPARING THE -- MAIN -- THE
LIGHTER RED WITH THE DARKER RED
LINE AND YOU SEE UPWARD
TRAJECTORY OF ANTICIPATED
VACANCY RATES. THE EXACT
OPPOSITE AS WHAT THE FORECAST
REVISIONS HAD BEEN FOR -- U.S.
AS A WHOLE, THE REVISION HAS
BEEN DOWN, THE OVERALL OUTLOOK
IS NOT PARTICULARLY GREAT. NOT
MUCH BETTER THAN A QUARTER AGO.
NEVERTHELESS, LIKE A -- IN THE
NEAR TERM WHERE IT'S --
SEATTLE IT'S -- THE OPPOSITE.
SO THAT'S ESSENTIALLY A COUPLE
OF THINGS THAT WE ARE SEEING
AND LEAVE US KIND OF WORRIED.
PROS AND HIGHER UNEMPLOYMENT
RATES AND HIGHER OFFICE VACANCY
RATES AND SLOWER RETURN TO THE
OFFICE IN GENERAL ARE FACTORS
THAT WOULD BE -- CONTRIBUTING
TO THE REVENUE FORECAST AND
ESPECIALLY LIKE THOUGH -- [
INAUDIBLE ] IN THE THERE ARE
SOME QUESTIONS, I WOULD MOVE TO
THE REVENUE FORECAST.
>> YEAH. ASK SOME QUESTIONS --
>> ALL RIGHT.
>> SO FIRST, LOOKING AT THE
GENERAL FUND REVENUES AND IN
PARTICULAR THE BASELINE
SCENARIO FORECAST. FOR 2024,
THE CHANGE IS FOR TOTAL REVENUE
THE CHANGE IS $3.3 MILLION TO
THE PLUS TAKING OUT CREDITS AND
TRANSFERS, IT'S SMALL DOWNWARD
TRADITIONS .2 MILLIONS. IN
GENERAL VERY SMALL A WHOLE
IT'S LESS THAN 0.2%. 3.3
MILLION REPRESENTS LESS THAN 2%
OF THE APRIL FORECAST. AND SO
NOT MUCH -- DIFFERENCE AS A
WHOLE. THE ONE NUMBER THAT KIND
OF IS LARGER COMPARED TO THE
REST OF THEM IS THE ONE FOR THE
BUSINESS AND OCCUPATION TAX.
BEFORE I -- TALK ABOUT THAT, I
SHOULD MENTION HERE THAT THOSE
LINES WHICH ARE HIGHLIGHTED
BLUE ARE THE ONES THAT THE
FORECASTING OFFICE IS
RESPONSIBLE FOR. SO SALES AND
OCCUPATION TAX AND PRIVATE
UTILITIES ARE THE ONES THAT ARE
OUR RESPONSIBILITY. THE BLUE
LINE FOR UNBALANCED TRANSFER
AND THAT LINE SHOULD PROBABLY
NOT BE HIGHLIGHTED BLUE. SHOULD
BE -- AT -- THAT ONE SHOULD BE
HERE WHERE THE PAYROLL TAX 2021
OBLIGATIONS ARE IS HIGHLIGHTED
AND SHOULDN'T BE. AGAIN SALES
TAX AND PRIVATE UTILITIES AND
PAYROLL EXPENSE TAX ARE --
FORECASTED BY THE FORECAST
OFFICE AND THE REST OF THEM ARE
FORECAST -- [ INAUDIBLE ] SO
LOOKING AT THOS OFFICES THAT
ARE FORECASTING THE LARGEST
CHANGE FOR THE BUSINESS AND
OCCUPATION TAX. MINUS $5.4
MILLION REVISION FOR 2024 IS
ACT 1.5% OF THE APRIL FORECAST.
THAT ARE DOWNWARD -- IT'S THE
RESULT OF LARGE REFUND. COUPLE
OF LARGER THAN TYPICAL REFUNDS
TO BE RECEIVED IN SECOND
QUARTER OF 2024. TOGETHER WITH
THE FACT THAT AFTER WE LOOK
MORE CLOSELY AT THE YEAR TO
DATE, ACTUAL REVENUE, LARGER
THAN EXPECTED PART WERE LATE
PAYMENTS AND NONCURRENT
PAYMENTS FOR PREVIOUS YEARS
RATHER THAN CURRENT -- FIRST
QUARTER PAYMENTS. SO THAT
SUGGESTS THAT MAYBE -- [
INAUDIBLE ] IT'S CERTAIN
DEGREE OF THE RESULT OF WHAT
HAS ALREADY HAPPENED AND THE
APPLICATIONS IN PREVIOUS YEARS
RATHER THAN THE ECONOMY
PERFORMING -- PERFORMING
SIGNIFICANTLY -- OR PERFORMING
WELL IN THE FIRST QUARTER OF
2024. SO SLIGHTLY LOWER THAN
EXPECTED REVENUE FOR FIRST
QUARTER TOGETHER WITH THE REST
OF THE YEAR TOGETHER WITH THAT
LARGE REFUND FOR FIRST AND
SECOND QUARTERS RESULT IN THE
B&O REVENUES THAT ARE
FORECASTED TO BE ALMOST
SLIGHTLY HIGHER YEAR OVER YEAR
AND HAS BEEN DOWN FOR --
BETWEEN APRIL AND AUGUST
FORECAST. AGAIN, 1.5% AND $1.5
MILLION AND SIGNIFICANT AMOUNT
ON -- ITS OWN. SMALLER SHARE --
>> YOU SAY $1.5 MILLION.
>> $5.4 MILLION.
>> AND JOHN, JUST CLARIFY, I
THINK I HEARD WHAT YOU -- I'M
GOING TO SAY WHAT I THINK I
HEARD YOU SAY AND TELL ME IF I
GOT IT RIGHT. THE NEGATIVE
DOWNTURN OF $5.4 MILLION
BUSINESS AND OCCUPATION WAS
ADMINISTRATIVE ISSUE ON OUR
END. NOT AN ECONOMIC ISSUE.
>> IT WAS A COMBINATION OF A
FEW THINGS HERE. SO -- YEAH.
FIRST OF ALL, THOSE LATE
PAYMENTS ARE NOT REALLY -- JUST
THE FACT THAT SOME TAXPAYERS
MIGHT HIRE -- WE ARE RECEIVING
THE LATE PAYMENTS AND THEY ARE
KIND OF -- A USUAL. THE
QUESTION IS TO WHAT EXTENT --
HOW LARGE THEY ARE? AND WHAT WE
HAVE SEEN IN THE FIRST QUARTER
IS LARGER THAN TYPICAL LIKE
PAYMENT. WHICH MEANS -- OUT OF
THE OVERALL REVENUE RECEIVED,
THE FIRST QUARTER CURRENT
OBLIGATIONS ARE SMALLER THAN
TYPICAL SHARES BETWEEN THEM.
LESS ECONOMIC ACTIVITY IN THE
FIRST QUARTER OF 2024. SO THAT
MEANS -- LEECONOMY AND
BASICALLY THROUGHOUT THE REST
OF THE YEAR. IT'S ALSO IMPLIED
BY THE DOWNWARD REVISION TO THE
ECONOMY AND -- THE EMPLOYMENT
FORECAST. BUT THAT $5.4 MILLION
DOWNWARD REVISION WOULD BE
PRIMARILY ATTRIBUTED TO THE
SLOW INCOME -- CAUSING ISSUES.
>> THANK YOU. OTHER QUESTIONS?
BEFORE WE RUN TO THE NEXT
PRESENTATION. DO YOU HAVE MORE?
>> NO.
>> ALL RIGHT. SO SMALL 0.2%
CHANGE UP FOR '24. UP FOR '25,
AGAIN, NOT -- NOT PARTICULARLY
LARGE REVISION FOR GENERAL FUND
AS A WHOLE. BUT NOW DOWNWARD
REVISION. $5.3 MILLION IN
TOTAL. EXCLUDING RENTS AND
TRANSFERS OF $6.9 MILLION. NOW
WE ARE SEEING COUPLE OF THOSE
MAIN REVENUE STREAMS CONTINUING
TO DOWNWARD REVISION. SALES AND
NEWS TAX AND BUSINESS AND
OCCUPATIONAL TAX AGAIN ARE THE
-- PRIMARY ONES HERE. IT'S AN
OCCUPATION TAX SAME STORY AS
BEFORE. SLOWER EMPLOYMENT
GROWTH IN 2025. MEANS LESS
ECONOMIC ACTIVITY AND -- AND
RESULTS IN B&O TAXES COLLECTED
THAT ARE FEWER. FOR SALES AND
USE TAX, THE -- THERE'S AN
ADDITIONAL FACTOR AND S&P
GLOBAL HAS REVISED DOWN THEIR
FORECAST FOR RETAIL SALES AND
THOSE RETAIL SALES IN THE U.S.
ARE AN ADDITIONAL THING WE ARE
TAKING INTO ACCOUNT DEVELOPING
OUR FORECAST FOR RETAIL SALES
IN THE REGION. AND THAT KIND OF
REVISION 1% LESS IN RETAIL
SALES IN THE U.S. TRANSLATES TO
LOWER RETAIL SALES AND LOWER
SALES AND USE TAX AND OUR
FORECAST. 4.4%. WHICH IS ABOUT
1.2% OF THE APRIL SALES TAX
FORECAST. NOW MOVING ON TO
2026, SAME STORY FOR SALES AND
USE TAX. BUT THEN OCCUPATIONAL
TAX. THEY ARE LARGER AS THE
EFFECT OF SMALLER AND SLOWER
EMPLOYMENT GROWTH ACCUMULATE
OVER A LONGER PERIOD. AND --
THAT RESULTS IN ABOUT $8.5
MILLION BETWEEN -- $8.7 BILLION
AND OCCUPATIONAL TAX AND
DOWNWARD REVISION, THOSE ARE
THEN OFFSET BY AN INCREASE
$18.4 MILLION IN THE PROPERTY
TAX AS A RESULT OF THAT THE
OVERALL CHANGE FOR THE GENERAL
FUND HERE IS $15.3 MILLION TO
THE PLUS SIDE WHICH IS -- WHICH
IS ABOUT 0.8%. SO IN TERMS OF
LARGE OF CHANGE, IT IS A
FRACTION OF GENERAL FUND
FORECASTING, LESS THAN 1
PRESIDENT. BUT SIGNIFICANT
AMOUNT -- 1%. BUT SIGNIFICANT
AMOUNT AND THE POSITIVE SIDE
AGAIN BRINGS BACK -- THE
FORECAST OFFSETS THE DOWNWARD
REVISIONS IN THE SALES TAX AND
BUSINESS AND OCCUPATIONAL TAX.
AND HOW IT AFFECTS THEM AND
PROVIDES SOME ADDITIONAL
INFORMATION NOW TO THE PUBLIC
NEXT YEAR.
>> SURE. THANK YOU. AND THE
BUDGET OFFICE AND TAKE THIS
OPPORTUNITY TO INTRODUCE MY
CO-WORKERS HERE WHO ALSO TALK
TO THE FORECAST. BILL RUSSELL
TO THE LEFT AND ONLINE WE HAVE
ALEX ZHANG. WE WILL BE TALKING
-- AGAIN JUST TO -- GIVE YOU
SOME HIGHLIGHTS. SO THE
PROPERTY TAX, YEAH WE WANT TO
TAKE MINUTE HERE. THE PROPERTY
TAX LINE INCLUDES BOTH THE
GENERAL EXPENSE LEVY THAT THE
COUNCIL APPROVES EVERY YEAR.
AND DECIDES ON WHAT RATE OF
INCREASE ET CETERA UP TO
MAXIMUM 1%. AND THEN IT ALSO
INCLUDES THE -- MEDIC ONE LEVY.
AND SO THE EMERGENCY MEDICAL
SERVICES LEVY. AND THAT IS
COMING UP FOR RENEWAL AT A VOTE
IN 2025 FOR COLLECTION IN 2026.
AND MOST OF THE CHANGES THAT
YOU ARE SEEING HERE IN THE
PROPERTY TAX LINE ARE DUE TO
THE CHANGES IN THE MED -- THE
EMS LEVY. SO IN 2025, WE HAVE A
DOWNWARD MINUS $2.1 MILLION
REVISION AND THEN IN 2026, AS
HE SAID WE HAVE INCURRENCE OF
$18.4 MILLION WHEN IT RENEWS.
THE DYNAMIC THAT YOU HAVE TO
UNDERSTAND ABOUT THE MEDIC 1
EMS LEVY IT'S A COUNTY WIDE
TAX. AND BASED ON COUNTY
ASSESSED VALUE, TOTAL COUNTY
ASSESSED VALUE, THAT'S HOW THE
RATE IS DETERMINED. THE AMOUNT
THAT THE CITY RECEIVES IN
REVENUE FROM THE EMS LEVY IS
BASED ON THE CITY'S ASSESSED
VALUE TIMES THAT RATE. AND SO
WHEN THE COUNTY'S ASSESSED
VALUE INCREASES. IT LOWERS THE
RATE AND DEPENDING ON WHAT
HAPPENS TO SEATTLE'S ASSESSED
VALUE. WE GET THAT RATE TIMES
OUR ASSESSED VALUE SO WHEN OUR
-- WHEN THE COUNTY'S RATE GOES
UP FASTER THAN THE CITY'S
ASSESSED VALUE, WE END UP
GETTING LESS REVENUE BECAUSE OF
JUST THAT MATHEMATICS THAT WORK
OUT WITH THE DIFFERENCE BETWEEN
THE COUNTY'S ASSESSED VALUE
AND THE CITY'S ASSESSED VALUE
WHICH DETERMINES THE CITY'S
LEVY PROCEEDS. SO IN 2025,
WHAT'S HAPPENED IS EXACTLY
THAT. THE COUNTY'S LEVIED
CHANGED THE RATE AND OUR LEVY
-- OUR LEVY -- AVESSED VALUES
CHANGED AS WELL AND THE RESULT
OF THAT IS LESS REVENUE FOR THE
CITY. $2.1 MILLION LESS
REVENUE. IN 2026, WHAT WE HAVE
IS -- WHATEVER IT'S GOING TO
BE, THE COUNTY, BUT THROUGH THE
POLITICAL PROCESS OF
DETERMINING WHAT THE RATE IS
FOR THE EMS LEVY, WE HAVE
ASSUMED 26.5 CENTS HERE. WE
DON'T KNOW WHAT IT'S GOING TO
BE BUT WE HAVE ASSUMED A LOWER
-- A LOWISH RANGE RATE FOR THE
LEVY. AND SO 26.5 CENTS TIMES
THE FORECASTED ASSESSED VALUE
OF THE COUNTY -- I'M SORRY,
THE CITY. YIELDS THE -- AUGUST
FORECAST AMOUNT. WE DO NOT
INCLUDE ANY FORECAST IN THE
APRIL -- IN THE APRIL FORECAST
FOR THE EMS STUDY. NOW I HAVE
GOT MORE INFORMATION AND MORE
INTELLIGENCE ABOUT HOW THEY'RE
TALKING ABOUT IN THEIR
COMMITTEE. SO -- WE THOUGHT IT
WOULD -- FAIR TO PUT IT IN. AT
THIS TIME IT WILL CHANGE. BUT
AT THIS TIME, THAT'S WHAT
WE'RE PROJECTING.
>> THANKS. THAT'S VERY
HELPFUL. SO LOOKING AT '26
THOUGH, WE'RE MOVING THAT
PROPERTY TAX -- WOULD THAT PUT
US BACK IN THE RED?
>> YEAH. BECAUSE OF ALL THE
OTHER RED -- ITEMS IN SALES IS
THE STOCK -- UNTIL PRIMARILY --
THAT THERE ARE SOME OTHERS DOWN
THE LINE THERE.
>> OKAY. AND SO THAT --
>> WHICH WOULD MEAN THE VOTE --
RIGHT. WE WOULD DEFINITELY --
WE GOT THE EMS LEVY AND --
>> BOTH THE $18 MILLION IN THE
POSITIVE. HOW MUCH OF THAT
WOULD BE -- HOPEFULLY FOR THE
EMS LEVY?
>> TECHNICALLY ALL OF IT.
>> GREAT.
>> THAT DOESN'T MEAN -- TOOK
THE WORDS RIGHT OUT OF MY
MOUTH.
>> SORRY. [ LAUGHTER ]
>> CITIBANK'S GENERAL
ALLOCATION TO THE FIRE
DEPARTMENT COVER THEIR COSTS
AND AMONG THOSE COSTS ARE EMS
LEVY COSTS AND ALWAYS HAVE
BEEN. THIS HELPS. EFFECTIVELY
GENERAL REVENUE. WE ARE DOING
IT FOR THE FIRE DEPARTMENT. SO
THEY CAN -- DO EMERGENCY
MEDICAL SERVICES RIGHT INTO THE
DAY AND INCREASES OUR GENERAL
FUND OF TOTAL AVAILABLE
RESOURCES FOR GENERAL
GOVERNMENT. AMONG WHICH OUR
FIRE DEPARTMENT.
>> OKAY.
>> IT HELPS PAY FOR THE FIRE
DEPARTMENT BUT WE HAVE LOT
OF,LOT OF OTHER COSTS THAT THIS
IS --
CHART BY THE UNDERSTANDING I AM
SEEING NEXT YEAR EITHER AFTER
IN THE RED THIS IS ALL A
BASELINE. NOT A RECESSION. IS
THAT CORRECT?
>> CORRECT.
>> SO, EVEN IF WE STAY IN THE
BEST SITUATION POSSIBLE WHICH
IS NOT POSSESSION. WE ARE STILL
IN THE BOTTOM, AND SLOW GROWTH
IS SO SLOW THAT IT'S NOT
MAKING AN IMPACT ON A BUDGET
RIGHT NOW.
>> YEAH. IF YOU ARE THINKING
ABOUT PROPERTY TAX ALONE --
>> THE WHOLE THING.
>> YEAH, SO GOING BACK TO THE
WHOLE AMOUNT AND WHAT THIS ALL
MEANS. WE ARE TAKING OUT THE
18.4 OUT OF -- AROUND $3
MILLION OR 0.2% DOWNWARD
REVISIONS ARE SIMILAR IN SIZE.
JUST GOING IN THE OPPOSITE
DIRECTION. SO, ACROSS THOSE
THREE YEARS IT WILL BE ADDING
UP. WE EXCLUDE THOSE. HOW MUCH?
MY IMPORTANT THING HERE IS
IT'S A CHANGE BETWEEN THE
APRIL FORECAST. IT'S NOT
REALLY SAYING THE
YEAR-OVER-YEAR WE ARE
FORECASTING INCREASES THE
OVERALL. AND IT COMES TO THE
ANNUAL GROWTH OF REVENUE. THERE
IS A LINE AT THE BOTTOM. RIGHT
ABOVE SEATTLE INFLATION RATE
FORECAST. THOSE PRESENT AMOUNTS
ARE A YEAR-OVER-YEAR CHANGES IN
THE GENERAL FUND. EXCLUDING THE
-- SO, FOR 2025 PLANNED
FORECAST IT'S ABOUT 2.3%
INCREASED. EXCLUDING, TRANSFERS
FOR 2026. AGAIN, THIS INCLUDES
THE 18.4 IN PROPERTY TAX.
>> THE THING THAT I'M LOOKING
AT HERE THAT SEEMS CONSISTENT
IN THE SALES GOING DOWN
REGULARLY FROM NOW UNTIL '26.
SO, EVEN THOUGH THE LEVY HAS
THAT AT 18.4 IT DOESN'T CHANGE
THE FACT THAT WE ARE HAVING
SOME SALES AND -- ISSUES
CONSISTENTLY.
>> YEAH. SO, THROUGHOUT THOSE
YEARS THERE'S A REPUTATION,
AND SALES TAX. THAT'S WHY WE
ARE SEEING ALL THE NUMBERS IN
THOSE THREE LINES. WE ARE
LOOKING AT HOW MUCH THEY CHANGE
OVER TIME. FOR SALES TAX IT'S
339.9. SO, 40 MILLION FOR.
SLIGHTLY DOWN FOR 2024. THEN
THE GROSS IS EXPECTED TO --
JUST AGAIN. SALES TAX
INCREASING 352.7. AND THAT
INCREASING TO 307 IN 26. THAT
WAS OUR BELIEF. APRIL RIGHT
NOW, SLIGHTLY HIGHER FORECAST
FOR '24. SO, YOU ARE OVER HERE
PRETTY MUCH UNCHANGED AT 340
MILLION. FOR AUGUST WE HAVE
WRITTEN DOWN THE FORECAST BY
5.4 MILLION. BUT, IT STILL
REPRESENTS A YEAR-OVER-YEAR
PROCESS FOR SALES TAX. ALL THE
TIMES WE -- NOT AS WHAT WE WERE
EXPECTING.
>> YEAH. YEAH. WELL, THAT'S MY
POINT. YEAH. WHICH IS A
CONCERN.
>> I JUST WANTED TO SAY THANK
YOU FOR FILLING OUT THE ANNUAL
YEAR-OVER-YEAR. BECAUSE I WAS
IN A VERY NEGATIVE HEADSPACE
JUST SEEING APRIL TODAY. IT'S
NOT BAD.
>> EXACTLY. FOR SOME REASON
THEY WILL HIT A RECESSION IN
THE NEXT MONTH OR SOMETHING.
AND STEP IN TO CHANGE INTEREST
RATES. THIS IS GOING TO BE OUR
BEST LINE.
>> RIGHT.
>> AND THEN WE WILL --
>> YEP.
>> THAT WOULD CHANGE THIS IS
WHAT YOU ARE SAYING. YEAH.
>> IT WILL. YES. IT WON'T TAKE
MORE THAN ONE MONTH.
>> SO, IN BETWEEN THE SPACE
FORECAST, AND THE ONE WE ARE
GOING OVER IN OCTOBER. IN
SEPTEMBER. MARKETS ARE SUPPOSED
TO LOOK AT HOW MUCH THE
INTEREST RATES ARE CUT. YOU
WILL RECEIVE A FEW MORE
IMPORTANT SITUATION REPORTS. [
INAUDIBLE - STATIC ] NOT GOING
TO SIGNIFICANTLY ALTER WHAT WE
SEE HERE.
>> BUT, THE OTHER POINT WITHOUT
IS A SEATTLE HAS BEEN TRENDING
WORSE THAN THE NATION. AND THAT
IS THE WORST OF WHERE WE WERE.
>> SO, AGAIN THESE ARE THE
PROVISIONS FOR THE EMPLOYMENT.
THEY VOW THEY ARE GOING TO SEE
WHICH DIRECTION THE. IF THERE
IS ANOTHER DOWNWARD VERSION
THAT WAS EARLY. [ INAUDIBLE -
STATIC ]
>> I ALWAYS LOOK AT THIS IN
TERMS OF WHAT DO WE HAVE MOST
CONTROL OVER? AND THAT IS AS
YOU SAID ACTIVITY, ECONOMIC
GROWTH. THE INDICATORS I'M
ALWAYS LOOKING AT ARE THE TAX,
IN THE SALES, AND USE. THAT IS
A WINDOW INTO WHAT ARE PEOPLE
DOING OUT THERE IN OUR ECONOMY?
>> THE POLICY CONSIDERATIONS
WILL HELP. PREVENT FURTHER
LOSS. CORRECT. CORRECT. THAT
ARE WITHIN OUR CONTROL IN ANY
WAY. OR, WITHIN OUR CONTROL
FULLY.
>> SO, MOVING ON TO OTHER
REVENUE STREAMS TO SELECT MAJOR
REVENUE STREAMS OUTSIDE THE
GENERAL FUND. AND THE LARGEST
OF THEM. THEY ARE ALL EXPENSE
TAX. THEY WILL SUMMARIZE
EXPENSE TAX. SO, WE ARE
INCLUDED IN THE PREVIOUS SLIDE.
AS THEY ARE STILL DEPOSITING. [
INAUDIBLE - STATIC ] THE
FORECAST HAD BEEN REVISED UP
FOR 2024 BY ABOUT 9.7 MILLION.
THE OTHER LARGE REVISION FOR
2024 IS THREE FORECAST
PROVISION UP BY 4.9 MILLION. WE
HAVE SEEN A COUPLE OF LARGE
PROPERTY SALES IN THE SECOND
QUARTER OF 2024. IN A COUPLE OF
ABOUT WHAT WE WERE EXPECTING.
SO, YOU KNOW FOR A LONG TIME.
BUT, LARGER STATE PROPERTIES
WERE SOLD. THAT LED US TO
IMPROVE THE FORECAST. OTHER
THAN THAT WITH THE REMAINING
REVENUES. A MINOR DOWNWARD
PROVISION. FINALLY, FOR 2026
WE'VE GOT EXPENSE TAX
PROVISION. A VERY SMALL CHANGE.
ESSENTIALLY, '25, '26.
>> THERE FORECAST?
>> CAN YOU TALK A LITTLE BIT
ABOUT HOW THEY -- I UNDERSTAND
THE PAYROLL TAX EXPENSE APPLIES
ONLY SELECT BUSINESSES, AND OF
THOSE BUSINESSES ONLY TO THE
HIGHEST-PAID EMPLOYEES WITHIN
ELIGIBLE BUSINESSES. SO, IT'S
A SUBSET OF THE TOTAL
WORKFORCE. WE SAW IN PREVIOUS
SLIDES THAT THE SEATTLE AREA
HAS -- INCREASING UNEMPLOYMENT.
INCREASING EMPLOYMENT. HOW IS
THIS FORECAST PUT TOGETHER ?
THAT COMES UP WITH GOOD NEWS AT
THAT SUBSET OF TOTAL
EMPLOYMENT? THIS PARTICULAR
REVENUE STREAM IS UNLIKE THE
OTHER.
>> CHANGES IN TOTAL EMPLOYMENT.
IF IT'S WITHIN THE SECTOR THAT
IS FOR THE TAX SPACE FOR THESE
PARTICULAR REVENUE STREAMS. AND
IN GENERAL, LOWER EMPLOYMENT IN
THE PARTICULAR SECTOR THAT
LEADS LOWER FORECASTS FOR THESE
PARTICULAR REVENUE STREAMING.
THERE ARE ADDITIONAL THINGS
THAT AFFECT THE FORECAST IN
TERMS OF HOW IMPORTANT THEY
ARE.
>> IF THERE ARE FEWER
EMPLOYEES. IF THE COMPENSATION
FOR EMPLOYEE GOES UP. THAT'S A
LARGE PART OF THE CONVERSATION.
>> IT'S IMPORTANT TO NOTE OUT
HERE IS THE CHART IS SHOWING ON
THE OUTLOOK FOR MARCH. AND INTO
JULY BEFORE -- SO, BACK IN
MARCH THE OVERALL OUTLOOK FOR
THE STOCK MARKET WAS VERY
POSITIVE. VERY STRONG AMONG
SOME OF THE MAIN REGIONAL
EMPLOYERS. AND THAT HAS NOT
CHANGED SIGNIFICANTLY BETWEEN
MARCH, AND JULY. SO, MOVING
FROM THOSE ANTICIPATED STOCK
CHANGES BACK IN MARCH. THEY
HAVE DISSIPATED FOR THE REST OF
THE YEAR. FOR THE OVERALL
CHANGE IN THE STOCK PRICE.
COMPANY BY COMPANY. THAT STOCK
PRICE OUTLOOK. AGAIN, WE CAN GO
INTO STATE ALMOST COMPILED. OF
COURSE, PRETTY STRONG. THE
OVERALL GROWTH FOR S.A.P. 500
IN JULY. PEOPLE'S FORECAST WAS
23%. FOR THIS EUROPE FROM 19%
FORECAST. MARCH. OVERALL,
BETTER OUTLOOK FOR THE STOCK
MARKET. THESE THINGS CAN CHANGE
SIGNIFICANTLY. IN THE
APPROPRIATE FORECAST. IF THE --
AND THE FINANCIAL MARKET
CONTINUES THE STOCK PRICES ARE
PENDING DOWN AS THEY ARE NOW.
IF THEY AREN'T RECOVERING
SIGNIFICANTLY. YOU WILL LIKELY
RECEIVE THOSE TWO DOGS TO THE
LEFT. HOW MUCH TO THE LEFT? IN
GENERAL THE DATA HERE TRIES TO
PROVIDE SOME SENSE OF HOW MUCH
UNCERTAINTY THERE IS REGARDING
STOCK PRICE CHANGES. THE LINE
AROUND EACH DOCK GOES FROM THE
LOW TO THE HIGH ESTIMATE IN
DATA. THIS IS THE DATA THAT IS
COMPILED FROM WALL STREET
JOURNAL ANALYSTS WHO ARE
ESSENTIALLY PROVIDING THEIR
OUTLOOK ON STOCK PRICES, AND BY
COMPANY. BUT, AND OCCASIONALLY
THERE IS A LARGE AMOUNT OF
UNCERTAINTY. OF THE FACT THAT
THOSE LINES CAN BE QUITE, QUITE
LONG. QUITE A LARGE RANGE FROM
THE LOW TO THE HIGH ESTIMATE.
IN GENERAL, AS WE ARE GETTING
CLOSER TOWARDS HERE AND THOSE
SIGNS WILL BE SHRINKING. AND
THE POINTS WILL BE EVENTUALLY
WHERE THEY END UP. BUT, WE ARE
STILL MORE THAN HAPPY TO GO.
AND THERE IS NO GUARANTEE THAT
THE ACTUALS ARE FAR AWAY FROM
THOSE -- WHERE THEY ARE NOW.
ESPECIALLY, THE LABOR MARKET
UNDERPERFORMS FINANCIAL MARKET.
SO, WE ARE SEEING THAT'S
HEADING FOR A HARD LANDING.
>> DO YOU END UP WAITING? I SEE
THE COMPANIES THAT YOU ARE
LOOKING AT. SOME OF THEM HAVE A
BIGGER WORKFORCE IS IN SEATTLE
THAN OTHERS. AND THEREFORE,
SUBJECT TO THE TAX.
>> YEAH. SO, THESE COUPLE OF
COMPANIES ARE HERE JUST IN
REFERENCE. NOT EXACTLY THE
COMPANIES THAT ARE SUBJECT TO
THE TAX. RIGHT AMOUNT OF TAXES
[ INDISCERNIBLE ] WHERE THOSE
EMPLOYEES ARE LOCATED. THAT THE
COMPANIES CAN USE TO ASSESS
THEIR OBLIGATIONS. ALL THAT
SAID WE ARE TRYING TO INCLUDE
THE INFORMATION THAT WE HAVE TO
FORECAST THAT REVENUE. LOOKING
AT WHAT WE HAVE SEEN IN THE
PAST. WE ONLY HAVE CERTAIN
YEARS OF TAX COLLECTIONS. SO,
VERY LIMITED EXPERIENCE WITH
THIS PARTICULAR TAX. BUT, WE
HAVE SEEN SOME STATISTICAL
REGULARITIES.
>> THANKS.
>> THANKS FOR THE OPPORTUNITY
TO CHIME IN. SO, GIVEN THE
LIMITED TRACK RECORD WITH THE
P.E.T. WHAT'S HAPPENING WITH
THE STOCK MARKET RIGHT NOW.
WHAT'S THE ARGUMENT FOR YOU,
ZHANG? AS OPPOSED TO
PESSIMISTIC?
>> SO, WE ARE -- IF THIS
QUESTION COULD WAIT UNTIL WE
GET ABOUT TWO SLIDES INTO --
FURTHER INTO THE COMPARISON OF
THOSE SCENARIOS. CAN YOU STILL
HOLD ON WITH THAT QUESTION?
>> YEAH, SURE.
>> KNOW. IT SOUNDED LIKE WHERE
THE DIRECTOR WAS GOING WITH HIS
LINE OF QUESTIONING, AND
CORRECT ME IF I'M WRONG. WITH
THE NEGATIVE -- WITH THE
DOWNWARD TREND, AND THE P.E.T.
CONSISTENTLY OUTPERFORMING
ORIGINAL EXPECTATIONS. OR,
GOING UP.
>> YOU ARE SAYING WHEN YOU LOOK
AT THIS GRAPH HERE. WITH THESE
LISTED COMPANIES. IS A LOT
DEPENDS ON OUR TECH SECTOR.
RIGHT? I WILL JUST GO AHEAD,
AND SAY. SO, KEEPING THESE JOBS
HERE. IS IMPORTANT. IT SEEMS
LIKE I DON'T KNOW IF ALL OF
THESE COMPANIES LISTED HERE DO
HAVE OFFICES IN THE CITIES. I
MEAN, IS THAT SOMETHING THAT WE
SHOULD BE -- IF YOU WAIT FOR
THIS INFORMATION TO STAY HERE?
>> THIS INFORMATION HERE
PROVIDE SOME KIND OF -- FIRST
OF ALL, JUST PROVIDE SOME
INFORMATION ON WHERE WE ARE.
WHAT WE ARE BASING OUR FORECAST
ON. THEN A SECOND THING IS
THERE ARE SOME IN THE FORECAST.
THIS CHART PROVIDES SOME THINGS
THAT HIGHLIGHT SOME OF THOSE
TRACES. IT'S TEXTBASED. IT'S
VERY NARROW. IT'S LESS THAN
500 BUSINESSES. A LOT OF THEM
ARE IN THE TAX SECTOR. WITH
INFORMATIONAL BUSINESS
SERVICES. SECTORS. AND THE
LARGE SHARE OF THE OVERALL
REVENUE IS JUST HALF OF THE
TAXPAYERS. SO, 70%. SO, THOSE
ARE THE COUPLE OF THINGS TO
TAKE INTO ACCOUNT. THE FACT
THAT HOW MUCH WE ARE GOING TO
COLLECT WILL DEPEND ON THE
DECISION OF THOSE COMPANIES.
WHERE TO CREATE ADDITIONAL JOBS
IN THE REGION. AND IT'S
SOMETHING THAT [ INDISCERNIBLE
] THEY WILL BE RESPONDING TO
POLICIES.
>> ALL RIGHT, SO BEFORE WE
DISCUSS OUR RECOMMENDATIONS FOR
SCENARIOS. WHICH SCENARIO
SHOULD BE ADOPTED AS THE
OFFICIAL FORECAST? THIS IS A
QUICK COMPARISON FOR THOSE MAIN
REVENUE STREAMS. THE LARGEST
REVENUE STREAMS THAT ARE
RESPONDING TO -- SO, ONE THING
THAT THIS CHART EXPLORES IS THE
PROPERTY TAX. BECAUSE IT'S
SMALL, BUT. PROPERTY TAXES
ROUGHLY IN THE SAME BALLPARK AS
THE OTHER REVENUE. AROUND 4
MILLION STORES BY 2026. SO,
THAT PRETTY MUCH COMPARES
PRETTY MUCH SAME AS PIECES OF
OCCUPATION TAX. VERY, VERY
SIMILAR. THIS IS AN OCCUPATION
TAX. IT'S A SELF-INDUCED TAX.
IT'S NOT INCLUDED HERE,
BECAUSE IT DOESN'T REALLY VARY
THAT MUCH ACROSS THOSE
SCENARIOS. IT'S MOSTLY THEY DO
NOT VARY AT ALL. BUT, MUCH LESS
THAN SOME OF THESE . SO, SALES
TAX BEING ANY PARTICULAR ANNUAL
EXPENSE TAX -- [ INDISCERNIBLE
] WOULD LEAD TO A DECLINE IN
SALES, AND USE TAX. DECLINE IS
MUCH LESS NOTABLE. AND WE ARE
TALKING ABOUT RECESSIONS. WE
ARE TALKING ABOUT IN GENERAL.
NOT NECESSARILY WHAT WE
RECEIVE. THE AMOUNT OF
UNCERTAINTY HERE IS MUCH LARGER
THAN FOR ANY OTHER REVENUE
STREAMS. GIVEN HOW MUCH IT
DEPENDS ON THE STOCK MARKET.
AND GIVEN OUR RELATIVE, LIMITED
TAX. THERE IS A LARGER AMOUNT
OF. SO, AGAIN LOOKING CLOSELY
AT EXACTLY WHAT THESE LOOK LIKE
IN TERMS OF DOLLAR AMOUNTS.
FIRST, PESSIMISTIC SCENARIO TO
THE BASELINE. ON THE OTHER SIDE
OF THE PAPER IS OPTIMISTIC
SCENARIO.
>> OVERALL, AS EXPECTED IT
WOULD BE QUITE SIGNIFICANT. IT
WOULD BE MUCH LARGER CHANGE IN
THE FORECAST THAN WHAT WE HAVE
SEEN IN OUR GENERAL FUND
REVENUE LABEL. IN GENERAL,
PROVISIONS LESS THAN A HALF
PERCENT. THIS RIGHT HERE
REDUCTIONS. AGAIN, IF THE
FINANCIAL MARKET IT HAS
UNDERPERFORMS, AND THIS IS NOT
YET TAKEN INTO ACCOUNT RECENT
DEVELOPMENTS IN THE STOCK
MARKET PLACES. THE LOWER END
SCENARIO BASED ON THAT -- END
OF JULY. BEFORE LAST WEEK. BUT,
THEY SUGGEST SIGNIFICANTLY THE
LAST EXPENSE TAX REVENUES.
>> I HAVE TALKED ABOUT THE
ASSESSMENT OF THOSE INDIVIDUAL
SCENARIOS. SIMPLY SUMMARIZE.
YOU SEE THE BASELINE SCENARIO.
55% PROBABILITY. COMPARED TO
25%. THERE IS AN UPSIDE. THE
25% REMAINING. THAT'S THE
OPTIMISTIC SCENARIO. BUT, AGAIN
RISKS ARE BUILT TOWARDS THE
OUTSIDE.
>> I JUST WANTED TO CHUNK JUMP
IN, AND CHECK-IN. AND THE
ANSWER TO YOUR QUESTION ON THAT
LAST SLIDE.
>> YEAH. SO, THE BASELINE
FORECAST FROM JULY BASICALLY,
GLOBALS FORECAST FROM THE
BEGINNING OF JULY, WHEN PREPARE
THE REST OF THE FORECASTERS.
IT'S NOT FAR PESSIMISTIC OR
OPTIMISTIC. OR, IN FAVOR OF
WHAT THE SCENARIO REPORTS.
AGAIN, THOSE FORECASTERS MIGHT
HAVE -- IS THE MOST LIKELY
FUTURECAST. THERE'S A COUPLE
OF THINGS THAT HAPPENED SINCE
THEN. WE'VE HEARD EMPLOYMENT
BEFORE. SO, INCREASED WORRIES
ABOUT THE POSSIBLE RECESSION.
REGIONAL LABOR MARKET GOING
SLOWER THAN THE NATIONAL ONE.
AND THE INITIATIVE 137. THERE
ARE SOME ADDITIONAL THINGS THAT
FALLS RISKS TO THE AND REVENUE
IN GENERAL. ALL OF THAT
TOGETHER, AND LOOKING AT WHAT
WE WERE RECOMMENDING AS A
SCENARIO. BUT, WE ARE
OFFICIALLY ADOPTING AS AN
OCCUPATIONAL FORECAST. WE ARE
STILL CONSIDERING. BUT, THAT
SAID FOR INDIVIDUAL REVENUE
STREAMS, THERE MIGHT BE REVENUE
STREAMS WHICH ARE GOING TO BE
MORE NEGATIVELY AFFECTED IN
CASE SOME OF THOSE RISKS DO
MATERIALIZE. BUT, THAT'S
OVERALL FOR GENERAL FUND. EVEN
THE CURRENT, STILL REASON TO
BELIEVE SOLID EXPECTATIONS .
THE PERFORMANCE. THE BASELINE
SCENARIO WOULD BE THE ONE THAT
WE HAVE RECOMMENDED. THE
FORECAST FOR THE GENERAL
EXPENSE TASK -- TAX ITSELF.
IT'S BASELINE SCENARIO IS NOT
AS CLOSELY LINKED TO THE
BASELINE FORECAST FROM S&P
GLOBAL. THE OVERALL MARKETS
OUTLOOKS, AND ASSESSMENT OF A
SUGGESTION IN THE STOCK MARKET.
SO, WE COULD . WHAT THEY
THOUGHT WAS AVAILABLE ALREADY.
WE INCLUDE THOSE CHANGES IN
LAST WEEK. WE WOULD MOST LIKELY
CHANGE THAT FORECAST. WHAT IS
HAPPENING IN THE FINANCIAL
MARKET RIGHT NOW. STOCK PRICES
MIGHT BE A BIT OF A --
CREATION. AND THINGS MIGHT
STABILIZE. AGAIN, IF YOU ARE
LOOKING AT THEM. NOT AS BAD.
INCREASING UNEMPLOYMENT RATES
FOR EXAMPLE IS TO AN EXTENT OF
THE RESULT OF A HIGHER SUPPLY
IN THE LABOR MARKET. WHICH IS
NOT NECESSARILY A BAD THING. IT
WOULD BE DIFFERENT IF THE
UNEMPLOYMENT RATE WAS
INCREASING, BECAUSE OF JOBS ARE
BEING HELD. BUT, WE ARE SEEING
IN THE LABOR MARKET, AND THE
U.S. AT THE SAME TIME,
UNEMPLOYMENT TRIES. WHICH MEANS
MORE PEOPLE TURNING TO LABOR
FORCE LOOKING FOR NEW JOBS. SO,
SOME OF THOSE AGAIN. JUST A
SPECULATION. SOME OF THOSE
CHANGES IN STOCK PRICES MIGHT
BE JUST THE EFFECT OF TRADES
THAT ARE BEING TRIGGERED ONCE
-- ON SOME STATISTIC
REGULARITIES. SUGGESTED THERE
IS A RECESSION COMING IN. BUT,
THE OVERALL SENSE WITH THE
FUNDAMENTALS IS BASELINE
SCENARIO. IT'S STILL THE ONE.
GIVEN THOUGH THERE MIGHT BE
SOME SIGNIFICANCE. AND IF THAT
INDEED CUTS THE INTEREST RATE
BY 50% IN THE FINANCIAL MARKET.
I AM EXPECTING THE STOCK PLACES
WOULD LIKELY STABILIZE. AND THE
OVERALL OUTPUT WOULD NOT
CHANGE. THERE IS A LOT OF
UNCERTAINTY. DON'T WORRY. IF
YOU HAVE ANY FOLLOW-UP.
>> YEAH. I APPRECIATE THE
EXPLANATION. YOU ALL DO
FANTASTIC WORK. IT'S EVIDENCE
BY THE FORECASTER. BY THOSE
REVENUE CATEGORIES OF WHICH YOU
HAVE A LOT OF EXPERIENCE. WE
JUST DO NOT HAVE A LOT OF
EXPERIENCE WITH THIS ONE. AND
YOU COULD SEE IT IN THAT PRIOR
GRAPH THAT YOU SHOWED WERE
THERE WERE THREE DIFFERENT
LINES IN BETWEEN THE SCENARIOS.
THAT IS A VERY WIDE CONFIDENCE
INTERVAL IF YOU WILL. SO, I
JUST TRY TO GET THAT KIND OF
VOICE IN THE PUBLIC DOMAIN.
WHICH IS IN A WAY TO SUGGEST
THAT WE ARE DEALING WITH
LIMITED INFORMATION. AND A LOT
IS HANGING ON THE STOCK MARKET
IN PARTICULAR WITH ITS PAYROLL
EXPENSE TAX CATEGORY. BUT, IT
JUST SEEMS LIKE IT'S IN A
DIFFERENT CONTEXT. THERE'S
OTHER SOURCES IN REGARDS TO THE
BASELINE PESSIMISTIC, AND
OPTIMISTIC CATEGORIZATIONS. NOT
LEAST AT WHICH THE UNDERLYING
DYNAMICS OF HOW THOSE DIFFERENT
FORECASTS ARE GENERATED. IT
SEEMS TO BE COMING FROM A
DIFFERENT PLACE. AND STOCK
ANALYST PICS AS OPPOSED TO S&P
GLOBALS UNDERLINED. FORECASTS.
IF I UNDERSTOOD THAT CORRECTLY.
>> YES. WE DO HAVE LIMITED
EXPERIENCE. WE HAVE SEEN --
WHERE IT SIGNIFICANTLY
UNDERPERFORMED THE INITIAL
FORECAST. IN GENERAL, EVEN WITH
MORE AVAILABLE. THESE
COMPENSATIONS ARE TO THESE
PRICE CHANGES. EVEN THOUGH HOW
HARD THE FORECAST OF THESE
PRICES YOU WOULD NEVER SEE
FORECAST ERRORS AS SMALL AS FOR
THE OTHER ONE.
>> REVENUE THAT'S GOING TO
CHANGE YOUR FORECAST TO
FORECAST QUITE SIGNIFICANTLY.
>> THANK YOU. AND I HAVE TWO
QUESTIONS? ONE IS ON THE JOB
GROUP. I UNDERSTAND WHAT YOU
ARE SAYING. WE HAVE MORE JOBS
AVAILABLE. PEOPLE ARE ENTERING
PROBABLY AT A HIGHER RATE. I'M
WONDERING OVER TIME. I KNOW
THERE ARE CERTAIN JOBS THAT WE
ARE STRUGGLING TO FEEL LIKE YOU
KNOW, WE DON'T HAVE ENOUGH
SOCIAL WORKERS. WE DON'T HAVE
ENOUGH CONSTRUCTION WORKERS. WE
DON'T HAVE, YOU KNOW THE
TRAITS. OVER TIME, YOU KNOW
THESE FOLKS NEED TO GET --
YOUNG PEOPLE NEED TO CHOOSE
THOSE JOBS TO FILL THOSE JOBS
OVER TIME. SO, HOW WILL THAT
IMPACT ALL OF THIS IF WE
CONTINUE TO SEE THE JOB GROWTH
HI. WE ARE STILL FILLING, BUT
SEE WHAT I'M TRYING TO SAY,
AND I DON'T THINK I'M
ARTICULATING IT PROPERLY. BUT,
WE ARE GOING TO HAVE A LOT OF
OPEN JOBS, BECAUSE WE DON'T
HAVE THE FOLKS TO ACTUALLY FILL
THOSE JOBS. HOW DOES THAT
IMPACT ALL OF THIS OVERTIME?
THAT'S MY QUESTION. OR, DOES
IT NOT?
>> WE HAVE -- TOTAL EMPLOYMENT
CHANGES. CHANGES IN TOTAL
EMPLOYMENT. WE DO HAVE DATA FOR
INDIVIDUAL INDUSTRIES. AND WE
LOOK AT THOSE MOSTLY. STAYING
ON THE OVER AMOUNT OF JOBS. AND
IT COMES TO OPENINGS. THERE IS
LESS A DATA -- OR LOCAL LEVEL.
IN THE U.S. AS A WHOLE. YOU SEE
WHERE EXACTLY IN THE U.S. THAT
THEY MIGHT BE ON THE REGIONAL
LEVEL. THERE IS ALWAYS LIMITED
DATA AVAILABLE AT THE ENTRANCE
OF INDUSTRIES PERFORMING. SO,
WHAT WE ARE TRYING TO DO IS DO
THE BEST WE CAN WITH THE DATA
WE HAVE. WHICH IS MOSTLY
EMPLOYMENT DATA. AND THE NEW
OPENINGS AS A WHOLE IN THE
INDUSTRY.
>> OKAY. THAN THE OTHER
QUESTION I HAVE IS WHEN YOU SAY
THE INITIATIVE 137 IS AN
ADDITIONAL RISK. CAN YOU TALK A
LITTLE BIT ABOUT THAT?
>> SO, THAT GOES BACK TO THOSE
CHARTS WE WERE PRESENTING ON
THOSE VACANCY RATES. YOU KNOW,
HIS VACANCY RATES ARE
INCREASED. WHICH MEANS FOR ANY
EMPLOYER DECIDING WHERE EXACTLY
TO CREATE JOBS. THERE IS GOING
TO BE A LOT OF OPTIONS
AVAILABLE. ALL THE INCENTIVES.
ALL THE INCENTIVES TO CREATE
JOBS. WHENEVER THERE IS A
POLICY THAT INCREASES. THERE IS
SOMETHING THAT. I'M GOING TO
HAVE TO MAKE DECISIONS WHERE.
BUT, FOR A LONGER TIME. THERE
ARE A COUPLE OF THINGS THAT ARE
-- ON MY SALES TAX THERE IS NO
LIMIT ON TAXES ON PAYROLL. SO,
THE FACT THAT IT'S 5% NOW. IT
DOES NOT GUARANTEE THOSE
BUSINESSES. IT'S 5%. IF THERE
IS IT'S GOING TO BE ANOTHER
PROPOSAL INCREASE. THAT'S
SOMETHING THAT THEY WILL TAKE
INTO ACCOUNT. IN THE PURPLES
THERE IS NO ADJUSTMENT FOR THE
INFLATION. WHICH MEANS THAT THE
CURRENT THRESHOLD OF 1 MILLION
WILL STAY AT 1 MILLION. THERE
IS NO SUNSET FOR THIS POLICY.
SO, ACTUALLY OVER TIME THE
MORE, AND MORE EMPLOYEES. AND
TO THE EXTENT THAT -- RESPONDS
TO INCENTIVES ARE PARTICULAR
INCENTIVES WHICH OBVIOUSLY ARE
VERY LOCAL. ONLY FOR A HANDFUL
OF EMPLOYERS. ONLY FOR A LARGE
NUMBER OF EMPLOYEES. AND
TRIGGERS -- SIGNIFICANT
RESPONSE. WE DON'T HAVE ANY
STATISTICAL DATA ON THOSE. WHO
WILL HAVE SOME REASON TO
BELIEVE THE DATA THAT WE'VE
SEEN.
>> SO, ASSUMPTIONS BASED ON OUR
HIGHER VACANCY RATES. WE ARE
MAKING AN ASSUMPTION.
>> THAT IS SOMETHING WE ARE
TAKING INTO ACCOUNT. THE CHART
DOES SHOW SEATTLE. AND THIS IS
SEATTLE VACANCY RATES. OR,
UNDER -- IN THE REGION.
ESSENTIALLY, A LOT OF SPACE
AVAILABLE. OR, HOW MUCH SPACE
MIGHT BE AVAILABLE.
>> AGAIN, WE WILL MAKE THAT
INTO ACCOUNT. IF WE DO SEE THE
FOURTH REVENUE. IF WE DO SEE A
LARGE NUMBER OF JOBS WHICH ARE
NOT CREATED IN SEATTLE. WHICH
MEANS. OVER EXPENSE TAX PAYS.
IT'LL LOWER THE EXPENSE TAX
REVENUE. OUR REVENUES FOR
EXAMPLE . OR, IN THE STATE
LOCATED IN THE CITY. WHENEVER
THERE'S A TRANSACTION THAT
INVOLVES A SALE OF THOSE
PROPERTY CITY COLLECTS. THAT IS
LOWER VALUES OF OFFICE TOWERS.
FOR LOWER DEMANDS OF OFFICE
SPACE. SALES TAX, AGAIN FEWER
EMPLOYEES PRESENT MEANS LESS
REVENUE. AND WE ARE EXACTLY
THOSE PEOPLE WHO DECIDE HOW
THEY GO THROUGH THE OFFICE.
THEN RESIDENCE OF THE PERSON.
MADE BY THE INDIVIDUAL MIGHT BE
SUBJECT TO THE SALES TAX. THAT
IS, AGAIN HARD TO TAKE INTO
ACCOUNT. THAT PERSON MIGHT --
IF IT'S EASY. IN THIS CASE,
SALES TAX MIGHT BE STRONGLY
AFFECTED. THE PERSON DECIDES TO
LOCATE, AND RESIDES CLOSER TO
THE OFFICE. WHICH IS FURTHER
AWAY FROM SEATTLE. WE ARE
MOVING THE PART OF THE SALES
TAX REVENUE WITH THE PERSON
MAKING ONLINE PURCHASES, AND
DRIVING OUTSIDE OF SEATTLE.
SALES TAX. WHERE THE PERSON
DECIDES TO GO.
>> YEAH.
>> YOU SEE THE AVAILABLE TAX
COME OUT. YOU SEE IT INCREASE
ONCE. YOU DON'T HAVE THE RISK
OF SEEING IT INCREASE AGAIN.
WHAT IS THIS?
>> IT IS INCREASE.
>> THERE WERE PROPOSALS TO
INCREASE EVERY YEAR. THIS WILL
BE ANOTHER INCREASE. IT WAS
INTRODUCED.
>> AND THIS WILL BE THE THIRD.
[ INDISCERNIBLE - LOW VOLUME ]
>> WHETHER IT'S AT A HIGHER
SCALE OR LOWER SCALE. ON A
NATIONAL SCALE.
>> YEAH. I JUST WONDERED
LONG-TERM WITHOUT WHAT TO DO TO
THE FORECAST. IT JUST KEEPS
EXPANDING.
>> POTENTIALLY, BY THE NUMBER
OF PEOPLE.
>> WHO ARE ELIGIBLE.
>> THIS BRINGS YOU TO YOUR
CONCLUSION.
>> THAT'S THE FINAL
CONCLUSION. YES. SO,
ACKNOWLEDGING THOSE -- WE DO
RECOMMEND THE BASELINE
SCENARIOS. AND TAKING INTO
ACCOUNT IT'S MORE LIKELY
TOWARDS THE DOWN SIDE OF THE
LAST SCENARIO.
>> IS THERE ANY MORE
DISCUSSION? I KNOW WE JUST HAD
DISCUSSION FROM OUR
PRESENTATION. I MOVE ON TO
TOTALLY IMPROVING THIS
FORECAST. WHEN YOU IMPROVE A
FORECAST. IN TERMS OF IMPROVING
A FORECAST. FORECASTING, AND
RECEIVING RECOMMENDATIONS. THAT
YOU ALL ARE. THAT SAID WE ARE
ALL SEPARATELY ELECTED. SO, I
WANTED TO RECOMMENDING A
BASELINE SCENARIO. IS THERE ANY
OPPOSITIONS LEFT?
>> I HAVEN'T SEEN NONE. SO, NO
OBJECTIONS. OF THE BASELINE
AUGUST 25th. ANYTHING ELSE?
>> JUST A QUESTION ABOUT
WHETHER THIS INFORMATION IS
ALREADY PUBLIC? OR, CAN WE TALK
ABOUT IT I GUESS? YEAH, THAT'S
WHAT I THOUGHT. BUT, I CAME A
FEW MINUTES LATE. AND I WANTED
TO MAKE SURE.
>> IT WASN'T THAT PUBLIC UNTIL
YOU WALKED IN.
>> OKAY. GREAT.
>> SO, SIMULTANEOUSLY WITH AN
EXECUTIVE THIS IS THE ACTUAL
STRUCTURE OF FORECAST.
>> WE HAVE PRESENTED OUR
AVAILABLE. WE WILL POST THE
FORECAST SPREADSHEET FILES.
>> BECAUSE THE PAST.
>> EVERYBODY GETS IT ALL AT
ONCE. IT'S AN EFFICIENCY
THING. I WANT TO MAKE SENSE.
>> WELL, I APPRECIATE IT TOO.
IT GIVES US AN OPPORTUNITY TO
ASK QUESTIONS IN A WAY THAT WE
ARE NOT ABLE TO IF WE ARE JUST
READING IT ONLINE OR WATCHING
THE PRESENTATION. SO, THANK YOU
FOR THAT ABILITY TO ASK
QUESTIONS EVEN THOUGH I WAS
JUST HERE OBSERVING.
>> THIS CONCLUDES OUR FORMAL
AGENDA. WE ARE ADJOURNING. WE
WILL HAVE ANOTHER FORECAST
COUNCIL MEETING ON OCTOBER
27th. IN THE 370. NOW I KNOW
YOU WILL BE PRESENTING A
COMMITTEE THIS WEDNESDAY. SO,
WE ARE EXCITED TO HAVE YOU
THERE. THERE ARE NO FURTHER
QUESTIONS?