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Using state reserves to fund new spending is one of the reasons we have a budget problem today

Former Gov. Inslee’s 2025–27 operating budget proposal included a transfer of the balance of the budget stabilization account (BSA, or the rainy day fund) to the general fund–state (GFS) in FY 2026. Then, Inslee proposed returning the money to the BSA in 2027–29. The proposed transfer acted as bridge funding for new spending until Inslee’s […]

Principles guiding Gov. Ferguson’s list of budget savings are sound, but the list includes items that aren’t true savings

Gov. Ferguson has released a list of budget savings options totaling $19.8 million in 2023–25 and $1.844 billion in 2025–27. According to the governor, the savings he presented today would total $3.926 billion over four years, and they are in addition to the savings former Gov. Inslee included in his Book 2 (preferred) budget proposal […]

Inslee’s Book 1 budget takes one spending reduction path; the Legislature could choose a different set of spending cuts to solve the budget problem

Each December, the governor is required to submit an operating budget to the Legislature that balances within existing revenues (the “Book 1” or “current law” budget). The governor may also propose a budget that increases revenues (the “Book 2” or “new law” budget). The budget proposed by former Gov. Inslee that included B&O tax increases […]

Caseload and utilization changes make up less than 40% of the maintenance level increase for 2025–27

The estimated budget shortfall for 2025–27 is the amount by which the estimated maintenance level exceeds existing resources. (Some estimates of the shortfall also throw in the cost of collective bargaining agreements with employees and other new policies.) The maintenance level for 2025–27, as estimated in former Gov. Inslee’s operating budget proposal, is $77.227 billion […]

Several tax increases under consideration in Washington would be the largest in over 30 years (at least)

State revenues for funds subject to the outlook (NGFO) are currently expected to increase by $5.040 billion from 2023–25 to 2025–27. The estimated budget problem for 2025–27 is the result of legislative spending choices. Nevertheless, several tax increases have been introduced in the Legislature and proposed by former Gov. Inslee and the Senate Democratic Caucus. […]

Remaining tax increases floated by Senate Democrats would increase property and real estate excise taxes and add new taxes on self-storage units and firearms

As I’ve written, the revenue options under consideration by the Senate Democratic Caucus (SDC) include business and occupation (B&O) tax increases, a payroll tax, a wealth tax, and increases to the capital gains tax rate. The remaining tax increases included in their options would increase the property tax growth limit, increase the real estate excise […]

Potential increases to the capital gains tax rate could increase revenues by over 30%

Last month, several revenue options being discussed by the Senate Democratic Caucus (SDC) were made public. One of the ideas is to increase the capital gains tax rate. (I’ve previously written about their ideas for business and occupation tax increases, a payroll tax, and a wealth tax.) Under current law, the capital gains tax rate […]

Beware the revenue estimates for proposed wealth taxes

Former Gov. Inslee proposed a wealth tax as part of his 2025–27 operating budget proposal, along with business and occupation (B&O) tax increases. Similarly, revenue options from the Senate Democratic Caucus that were made public last month include two versions of a wealth tax. (For previous posts on the revenue options, see here and here.) […]

Taxes paid by businesses in Washington are the 10th highest in the nation, on a per-employee basis

According to the Council on State Taxation (COST), Washington businesses paid $10,100 in state and local taxes per employee in fiscal year 2023, the 10th highest amount among the states. (Note that the states with the four highest per-employee taxes paid by business are Alaska, New Mexico, North Dakota, and Wyoming—all resource extraction states that […]

Budget savings directive from Gov. Ferguson would not reduce the maintenance level for 2025–27

Earlier this month, Gov. Ferguson released a budget priorities document that called for across-the-board spending cuts. This sounded like a promising way to start to close the operating budget shortfall. However, the document did not specify the spending level from which the reductions would be made. When I wrote about Gov. Ferguson’s proposal, I assumed […]