The Washington State Standard reports that two assisted living organizations are suing the state over the way the Legislature reduced assisted living facility rates this year. The 2026 supplemental operating budget (Sec. 938) delays a scheduled rate rebase from FY 2027 to FY 2028. This is estimated to reduce spending from funds subject to the outlook by $21.2 million and from federal funds by another $24.2 million.

The rate rebase was required by RCW 74.39A.032 (as part of SHB 2515, which was adopted in 2018). According to the Standard, the assisted living organizations “argue the Legislature approved an unconstitutional delay in updating reimbursement rates for their facilities by tucking it into the state’s 600-plus-page budget, instead of in a separate piece of legislation that would require its own approval.”

If the courts agree with the assisted living organizations, it could force broader changes to budget practices. It is not unusual for the Legislature to make changes to existing statutes in budget bills. For example, RCW 41.45.060 requires the employer contribution rate for public employees’ retirement system and school employees’ retirement system to include the amount needed to fully amortize benefit improvements made from FY 2019 through FY 2025 over a 15-year period. Sec. 916 of the 2026 supplemental includes benefit improvements made through July 1, 2026 (the first day of FY 2027) in that 15-year period.

The assisted living organization lawsuit is only the latest in a string of recent lawsuits related to the state budget. Others include:

• A lawsuit in federal court argues that the plan to terminate the Law Enforcement Officers’ and Firefighters’ retirement system Plan 1 and use the expected surplus for general spending violates the contract clauses of the federal and state constitutions.
• A lawsuit in Klickitat County Superior Court argues that the state income tax is unconstitutional.
• A lawsuit in Thurston County Superior Court argues that the digital advertising tax adopted in ESSB 5814 violates the federal Internet Tax Freedom Act (Comcast Corp. v. State of Washington).
• The Washington Association of Counties sued the state in 2023, arguing that the state should spend more on public defense.

All these cases are ongoing.