As I noted last week, Gov. Ferguson signed all the tax bills, except for one provision. He also vetoed several provisions of the operating budget. The final fiscal impact of these changes over four years will be clear when the official budget outlook is adopted June 10. However, it appears that the budget will still balance (even though it doesn’t have to).

By my count, compared to the operating budget passed by the Legislature, the governor’s vetoes will increase appropriations from funds subject to the outlook (NGFO) by about $22.9 million in fiscal year 2025 and decrease NGFO appropriations by about $14.3 million in 2025–27. (In terms of all budgeted funds, which include the NGFO, the vetoes increase appropriations by $13.2 million in FY 2025 and decrease them by $23.3 million in 2025–27.) For context, as passed by the Legislature, NGFO appropriations for 2025–27 were $77.872 billion.

For FY 2025, the governor vetoed some general reductions to the Department of Social and Health Services, lest the agency have insufficient resources to close the fiscal year. He also vetoed several shifts from NGFO accounts to the administrative contingency account for the Employment Security Department, as the programs are not allowable uses of the administrative contingency account.

For 2025–27, the governor vetoed several relatively small provisions. (The largest 2025–27 veto was $5 million for digital navigator services.) The reason given for most of the vetoes was “the state’s significant fiscal challenges and funding cuts from the federal government.” These items generally include studies and grants to nonprofits for specific purposes. For example:

• $250,000 for a grant to an Issaquah nonprofit for cultural programs,
• $200,000 for a grant to a Seattle nonprofit for low-income skating lessons,
• $150,000 for a grant to a Seattle organization for a study on its health delivery model,
• $100,000 for a grant to promote outdoor recreation access, and
• $80,000 for a study of housing options for people aged 55 and older.

However, the budget still includes many similar provisos, including, for example:

• $300,000 for a study on reparations,
• $200,000 for a grant to a nonprofit running emergency shelters “to help families stay housed while researchers study the effects of direct rental assistance on families,”
• $450,000 (non-NGFO) to study the value of distributed solar and storage,
• $528,000 (non-NGFO) to study insurers’ use of credit history, and
• $376,000 to study green stormwater infrastructure efficacy.