Blog

Promises for 2027–29

Under the four-year balanced budget requirement, the maintenance level (the cost of continuing current services, adjusted for inflation and enrollment) of the adopted budget must balance within expected resources for the next biennium. The 2026 supplemental operating budget that was passed by the Legislature yesterday increased net new policy spending for 2025–27 by $621.3 million. […]

Budget bill includes provisos related to fiscal sustainability

The conference report for the operating budget would widen the gap between spending and revenues that started in 2023–25. As I discussed yesterday, the income tax will not solve the problem; instead, the Legislature must limit spending. Nodding to that, the operating budget bill proposed by the conference committee includes more language about sustainability and […]

Policy changes in the operating budget conference report would increase appropriations by $621.3 million

As I wrote yesterday, the operating budget conference report would increase appropriations from funds subject to the outlook (NGFO) by $2.348 billion compared to enacted appropriations for 2025–27. That includes $1.727 billion at the maintenance level (the cost of continuing current services, adjusted for enrollment and inflation) and $621.3 million in net new policy. The […]

Conference operating budget would not balance even in the current biennium but for unusually high accounting assumptions

The conference committee’s operating budget proposal relies heavily on one-time resources, questionable accounting assumptions, and the new income tax. The proposal would increase appropriations from funds subject to the outlook (NGFO) by $2.348 billion (3.0%) over enacted 2025–27 appropriations. Revised 2025–27 appropriations would be $80.206 billion, which would be 11.4% higher than actual 2023–25 spending. […]

Paid family and medical leave rate structure changed again, but it does not improve program solvency

The Legislature has passed 2SSB 5292. If signed by Gov. Ferguson, the bill would change the paid family and medical leave (PFML) tax rate-setting formula. However, more will need to be done to address program solvency. Initially, the tax rate for the program was set at 0.4%. Beginning in 2021, the rate was set based […]

What will the Legislature do with the $4 billion in LEOFF 1?

The House and Senate have each passed different versions of HB 2034, the bill that would terminate the Law Enforcement Officers’ and Firefighters’ retirement system Plan 1 (LEOFF 1) and create a restated LEOFF defined benefit retirement fund. This would allow the state to extract expected surplus funds in the plan. The two versions differ […]

Proposed House striking amendment to income tax bill is supported by Gov. Ferguson, but there’s no fiscal note yet

The Senate passed the income tax bill (ESSB 6346) on Feb. 16. (I wrote about the bill as passed here.) As passed by the Senate, the income tax would increase revenues by $2.706 billion in 2027–29 and $7.537 billion in 2029–31. It would use some of those revenues for local government public defense ($189.4 million […]

House Finance version of estate tax bill would reinstate the exclusion amount glitch

Last year the Legislature increased estate tax rates and fixed a long-term problem with the inflation adjustment for the exclusion amount (ESSB 5813). This year, the Senate has passed ESB 6347, which would roll back the tax rate increases in ESSB 5813. Beginning with estates of people dying on or after July 1, 2026, the […]

New bills would temporarily prohibit the assumption of at least 4.5% revenue growth under the four-year balanced budget requirement (but there are apparent drafting errors)

Under the four-year balanced budget statute, the projected maintenance level of the budget cannot exceed available fiscal resources in the ensuing biennium (RCW 43.88.055). “Available fiscal resources” is defined as the greater of the official forecast of revenues to funds subject to the outlook (NGFO) or NGFO revenues increased by 4.5% each year. Thus, when […]

New brief: Comparing the Senate- and House-Passed 2026 Supplemental Operating Budgets

Despite a maintenance level budget shortfall, the operating budgets passed by the Senate and House would both increase net new policy spending. They would balance the budget in 2025–27 using one-time funds, and each proposal assumes that revenues from a new income tax will be collected beginning in 2029. Read the report here.