Blog

As CCA revenues are expected to decline, Legislature reworks their distribution

In the supplemental budgets, the Legislature increased 2025–27 appropriations from climate commitment act (CCA) accounts by $1.125 billion. Of that, $89.0 million was in the operating budget, $839.9 million was in the capital budget, and $196.5 million was in the transportation budget. (As I showed last month, $539.9 million of the capital CCA appropriations is […]

State tax collections increased by 4.5% in FY 2025

According to the Department of Revenue, state tax collections totaled $36.072 billion in fiscal year 2025. That was an increase of $1.565 billion (4.5%) compared to FY 2024 collections. (These are total state tax collections, not just revenues that are subject to the outlook.) Since 2020, business and occupation tax collections have grown by 277.9%, […]

A timeline of the effective dates of major tax changes adopted in 2025 and 2026

The final tax package adopted last year was the largest tax increase in modern Washington history, going back to at least the early ‘90s. (Digital legislative and fiscal records are spotty before the 2000s.) As we discussed in a report last year, the package was rushed through at the end of the 2025 session, resulting […]

Income tax bill is by far the largest tax increase in the modern era

The multiple tax bills adopted by the Legislature last year collectively represented the largest tax increase going back over 30 years. For this analysis, I reviewed fiscal notes and legislative budget notes. Digital legislative and fiscal records are spotty prior to the 2000s, but some information is available online going back to the early 1990s. […]

Washington’s fiscal situation prompts vetoes of just $800,000 from the operating budget

The 2026 supplemental operating budget, as passed by the Legislature, increases appropriations from funds subject to the outlook (NGFO) by $2.348 billion. Revised NGFO appropriations for 2025–27 are $80.206 billion. As we’ve shown, appropriations for the biennium exceed revenues by $4.9 billion. The budget balanced due to the use of one-time funds and unusual accounting […]

State will retain about 70% of annual income tax revenues

Gov. Ferguson has signed ESSB 6346, which imposes an income tax. The bill additionally reduces some sales taxes and some business and occupation (B&O) taxes and expands eligibility for the Working Families Tax Credit (WFTC). (I wrote about the details of the final bill last week.) The fiscal note for the enacted bill estimates that […]

New brief: Band-Aid Budget Redux

The Legislature has passed a supplemental operating budget that would increase 2025–27 appropriations from funds subject to the outlook (NGFO) by $2.348 billion (3.0%) compared to the enacted 2025–27 biennial budget. Revised 2025–27 appropriations would be $80.206 billion, which is 11.4% higher than actual 2023–25 spending. Since the biennial budget was adopted last year, the […]

New funding for wildfires and WEIA

Interest on loans that are primarily secured by first mortgages or trust deeds on non-transient residential properties is currently subject to the service and other activities B&O tax rate if the loan originator is located in more than 10 states (RCW 82.04.29005). Otherwise, such interest is deducted from B&O tax. SHB 2089, which has been […]

Baseball stats and tax policy

This Opening Day seems like a pertinent time to discuss tax policy, as the Legislature made a major tax change that could impact Washington’s tax structure’s Wins Above Replacement. Although taxes are not the only reason businesses and individuals choose to locate in a state, they are a factor. Some tax structures are more competitive […]

Supplemental transportation budget would use bonds to fund new highway preservation spending

The 2025–27 biennial transportation budget balanced thanks to a revenue package that included an increase to the gas tax and increased sales taxes on transportation-related transactions. The tax and fee increases were expected to increase revenues by $1.885 billion through 2027–29. These funds were used mainly to shore up existing projects. Nevertheless, the biennial budget […]