The collective bargaining agreements (CBAs) that the Office of Financial Management (OFM) negotiates with state and non-state employees would increase general fund–state (GFS) appropriations by $589.0 million in 2027–29. According to OFM, they would cost $772.9 million in 2029–31. These agreements have all been ratified.

Notably, the estimated costs of the CBAs are substantially lower than in 2025–27. The 2025–27 CBAs included wage increases of 3% in the first year and 2% in the second year; they were estimated to cost $1.376 billion.

The cost estimates for the 2027–29 CBAs do not include the cost of the consumer directed employer (CDE) rate setting for individual providers of in-home care (or providing agency parity), nor do they include the costs of extending the CBAs to non-represented employees. According to OFM, the proposed CDE rate and agency parity would add $124.0 million in 2027–29 (the cost in 2029–31 is not yet known). (This amount is not included in the table below.)

Of the GFS cost of the 2027–29 CBAs, about 70% ($413.1 million) is to maintain the current health care contribution split. Employers will continue to cover 85% of the cost of health care and employees will contribute 15%.

There are no general wage increases, but there are some wage increases for specific unions due to arbitration awards. Additionally, according to OFM, the CBAs include “an option for the state and union to reopen the contract over wages in fiscal year 2029, in case the budget picture changes mid-bargaining cycle.”

The idea that FY 2029 might be a better year for the budget is related to the “short-term problem” thinking I discussed on Friday. Given the continuing gap between appropriations and ongoing revenues, I find it hard to believe that there will be extra money lying around to cover potential wage increases in FY 2029—even if the income tax remains law. That said, it’s possible the revenue forecast could increase by then, or the Legislature could choose to shift funding from other priorities to employee compensation (as it did in 2025).

If the governor determines that the 2027–29 CBAs are financially feasible, he will include them in his budget proposal for 2027–29. Then the Legislature will either approve or reject them as a whole (RCW 41.80.010). (However, the financial feasibility rule doesn’t apply to all the non-state employee CBAs. For example, the family child care CBA is mainly the cost of increasing the subsidy base rate to the 75^th percentile of the market rate survey, which is required by statute. As OFM notes, this item is “not subject to financial feasibility.”)