Blog

What to make of the high capital gains tax collections for tax year 2025?

The Department of Revenue reported last month that capital gains tax collections for tax year 2025, which were collected in April and May 2026, totaled over $1.5 billion. (This is not the final number. All taxpayers must submit estimated payments in April, but taxpayers with filing extensions will finalize their payments in October 2026.) According […]

Happy Fiscal New Year!

Today is the first day of fiscal year 2027, which is the second year of the 2025–27 biennium. Washington’s current budget troubles are the direct result of the Legislature appropriating significantly more than was expected in revenues in 2023–25. Ultimately, actual spending from funds subject to the outlook (NGFO) in that biennium exceeded ongoing NGFO […]

Slower economic activity reduces the revenue forecast, but the budget outlook improves given capital gains tax revenues

The Economic and Revenue Forecast Council (ERFC) estimates that revenues from funds subject to the outlook (NGFO) will total $76.237 billion in 2025–27, $82.164 billion in 2027–29, and $91.739 billion in 2029–31. The new revenue forecast incorporates all the legislative changes made during the 2026 session, including the adoption of the income tax. Economic changes […]

Adopted pension contribution rates could save the state $325 million in 2027–29

On Tuesday, the Pension Funding Council adopted 2027–29 employer contribution rates for state pension plans. The rates for 2027–29, as calculated by the Office of the State Actuary (OSA), are expected to decline compared to 2025–27. OSA estimates that the adopted rates will reduce state spending by $325 million in 2027–29 (compared to current rates). […]

State liability account shortfall grows

Jim Brunner of the Seattle Times reports that the Office of Financial Management (OFM) has authorized the state’s self-insurance liability account (SILA) “to be in a temporary cash deficiency of up to $1.7 billion” in 2025–27. At this time last year, the state had authorized a temporary cash deficiency in the account of up to […]

New brief: With the Income Tax, Washington Adds a New, Volatile Layer of Taxation

Under ESSB 6346, a 9.9% tax will be imposed on Washington income over $1 million beginning Jan. 1, 2028. All the provisions in the bill, including the tax rate and the $1 million standard deduction, are statutory, so they could be changed by the Legislature at any time. The determination of taxable income begins with […]

Transportation revenue forecast is down again

According to the Transportation Economic and Revenue Forecast Council, transportation revenues are forecasted to total $8.705 billion in 2025–27, $10.617 billion in 2027–29, and $10.004 billion in 2029–31. Over the three-biennia period, this is $434.6 million less than expected in the February 2026 forecast. The 2026 supplemental transportation budget had balanced through 2029–31. Today’s reduction […]

Budget-related lawsuits piling up

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 […]

June caseload forecast reduces total caseload estimates for 2025–27

On Thursday, the Caseload Forecast Council presented the June caseload forecast. The caseload forecast feeds into the estimated maintenance level (the cost of continuing current and planned services, adjusted for enrollment and inflation). There will be another caseload forecast in November, which will inform the governor’s proposed 2027–29 budget, and another in February 2027, which […]

Average annual wage is up 4.9%, triggering increases to various state benefits and the UI taxable wage base

According to the Employment Security Department (ESD), the state average annual wage was $99,810 in 2025. That’s an increase of 4.9% over 2024. ESD reports that earnings increased by 4.7%, but covered employment declined by 0.2%. The state average annual wage is used to calculate state unemployment insurance (UI) taxes and benefits, paid family and […]