Emily Makings

Gov. Ferguson’s operating budget proposal would reduce policy level spending by a net of $85.1 million

As I wrote last month, Gov. Ferguson’s 2026 supplemental operating budget proposal would increase appropriations for 2025–27 from funds subject to the outlook (NGFO) by $1.159 billion. The maintenance level change (the cost of continuing current services, adjusted for caseloads and inflation) increases appropriations by $1.244 billion, but it is offset by net policy level […]

Governor doesn’t propose a general tax increase for the supplemental operating budget, but the proposal doesn’t balance over four years

The Office of Program Research estimated earlier this month that the operating budget shortfall is about $1.5 billion in 2025–27 and $4.3 billion over four years. Gov. Ferguson has proposed a supplemental operating budget that leaves a positive ending balance of $140 million in funds subject to the outlook (NGFO) at the end of 2025–27. […]

Budget proposals are starting to roll in

Yesterday Gov. Ferguson held a press conference to discuss the housing funding in his supplemental capital budget proposal. He is proposing an additional $244 million for housing (including programs in the operating budget). He also said that his office made some adjustments to the budget proposals to help with recovery efforts from the recent flooding […]

Will the dedication of 0.1% of the sales tax to the transportation budget be scrapped?

The Washington State Standard reports that there is talk among legislators of reversing a planned transfer of ongoing revenues from the operating budget to the transportation budget. In December 2024, legislative staff estimated that there would be substantial shortfalls in the transportation accounts. The 2025–27 transportation budget included a revenue package that was used mainly […]

Pre-filed bills would make changes to the 2025 tax package, including a proposed repeal of ESSB 5814

The 2025 tax package was rushed through the legislative process, leading to considerable uncertainty. The implementation of ESSB 5814, which extended the sales tax to more services, has been particularly fraught. Unsurprisingly, three bills have been pre-filed that would make changes to ESSB 5814. Additionally, two bills would make changes to ESSB 5794, which repealed […]

Washington would be worse off without the four-year balanced budget requirement

Lieutenant Governor Denny Heck was the keynote speaker at the Washington Observer’s Re-Wire Conference on Tuesday. During his talk, he brought up the estimated $4.3 billion budget shortfall and noted that there are three ways the Legislature could solve the problem (or a combination of the three): “Raise taxes, cut spending, or get creative with […]

Report describes options for LEOFF 1 surplus; state treasurer has concerns

There is a substantial expected surplus in the Law Enforcement Officers’ and Fire Fighters’ (LEOFF) Retirement System Plan 1. During the 2025 legislative session, there were several proposals to extract funds for use in the state operating budget. Ultimately, the enacted 2025–27 operating budget required the Select Committee on Pension Policy (SCPP) to “study and […]

Two pre-filed bills would increase certain state B&O taxes and a third would allow counties to levy B&O taxes

Last week, I wrote about a proposed payroll expense tax bill. Other bills have been pre-filed so far that would increase state or local business and occupation (B&O) taxes. County B&O Taxes HB 2097 would allow county legislative authorities to impose B&O taxes effective Jan. 1, 2027. The maximum county B&O tax rate would be […]

Legislative staff estimate that the operating budget shortfall is $4.3 billion over the outlook period

Non-partisan legislative staff estimate that the state operating budget has a shortfall of $4.3 billion over the outlook period. There should be no surprise here. As we wrote of the enacted 2025–27 budget in July, the sustainability of the 2025–27 budget is highly questionable. In addition to leaving a very small ending fund balance, the […]

Newly proposed payroll expense tax would be volatile and revenues would probably not materialize until FY 2028

The historically large tax package that was adopted earlier this year increased business taxes significantly. The adopted package did not include a payroll expense tax, though one was considered during the 2025 session (SB 5796). SB 5796 would impose a 5% tax on wages over the Social Security taxable wage base ($176,100 in 2025 and […]