It was clear from the get-go that the 2025–27 operating budget was not sustainable. Even before the state revenue forecast was revised downward in June and September, the Office of Financial Management (OFM) told agencies, “We will very likely continue to face a challenging state budget environment in the coming year.” Consequently, OFM asked them to, in their 2026 supplemental budget requests, “limit all discretionary budget requests” and find “[a]dditional options for efficiencies, reform, administrative savings, or reductions in non-essential services and programs.”

Agency requests for the 2026 supplemental operating budget were due to OFM on Sept. 15. Many agencies have not yet submitted requests, but the ones that have submitted accounted for 93% of the general fund–state (GFS) appropriations in the enacted 2025–27 budget. Altogether, the requests would increase GFS appropriations for 2025–27 by $1.324 billion (2.0%). The requests would cost $2.086 billion in 2027–29.

Of the 2025–27 change, the agencies classify $731.9 million as maintenance level (ML) and $592.5 million as new policy. (The maintenance level is the cost of continuing current services, adjusted for inflation and enrollment.) However, the amount considered ML will drop considerably as the budget process continues. The agency requests include many items in the ML that are actually new policy.

The requests that have been submitted are incomplete and preliminary. Nevertheless, it’s possible at this point to raise some general concerns about the requests. (I’ve written about several individual agency requests and will write about more in the future. The posts are available here.)

• Although the total amount requested so far this year is lower than was requested for the 2024 supplemental, none of the requests include savings options.
• The total amount does not include the estimated need for the state liability account shortfall, which could be $1.3 billion in 2025–27 and $767 million in 2027–29. (It’s not clear how much of that would come from funds subject to the outlook. According to OFM, about 70% of the liability account comes from funds subject to the outlook currently.)
• The total also does not include the cost of the collective bargaining agreement with the Washington Public Employees Association (which was ratified too late to be included in the biennial budget). According to OFM, it would increase GFS appropriations by $19 million in 2025–27 and $23 million in 2027–29.
• The requests are inconsistent about caseload costs. Some agencies (the Department of Social and Health Services, the Department of Corrections) use the June caseload forecast to estimate cost changes. (On net, caseload and utilization costs for the two agencies were down in June compared to the enacted budget.) Other agencies (Health Care Authority, Department of Children, Youth, and Families) submitted placeholder requests for caseload costs—they are waiting for the November caseload forecast.
• There are also placeholders related to unknown costs associated with federal funding changes.
• Agencies classified many items as ML that will almost certainly be considered new policy by the Legislature. For example, Health Care Authority classifies $142 million to restore program integrity savings as ML, but the Legislature has historically classified these restorations as new policy.

All told, the agency requests do not provide a good estimate of the maintenance level for 2026. (We’ll know much more when the governor’s budget proposal is released in December.) Note, too, that final enacted budgets typically appropriate less than requested by agencies.

Even ignoring all these spending requests, the state operating budget is already facing a shortfall of $421 million in 2025–27. Over four years, I estimate the shortfall is $1.221 billion, given the September revenue forecast and enacted spending. It’s possible the revenue forecast could improve (there are two more before the budget is adopted). If not, any increase in appropriations will deepen the estimated shortfalls.