The conference report for the operating budget would appropriate $77.872 billion from funds subject to the outlook (NGFO) in 2025–27. That is an increase of $5.927 billion (8.2%) over enacted appropriations for 2023–25. (The 2025 supplemental would increase 2023–25 appropriations by $751.8 million.)

Although the budget does assume significant savings, it doesn’t reduce spending on net. Indeed, the proposal would increase spending by $1.039 billion even over the maintenance level (the cost of continuing current services, adjusted for enrollment and inflation). Effectively, the budget shifts spending from previous priorities to new items, including funding the collective bargaining agreements with state and nonstate employees. (Notably, the proposal does not include any furlough days.)

The proposal includes major tax increases. The revenue package proposed last week includes business and occupation tax increases (HB 2081, which has not yet been passed, and SB 5794), excise tax increases (SB 5814), capital gains and estate tax increases (SB 5813), and a tax on certain surpluses in the zero-emission vehicle program (HB 2077, which has not yet been passed). (Subsequent changes to the property tax bill mean that it no longer has a state revenue impact.)

Additionally, the revenues assumed in the operating budget include various transfers to and from the transportation budget. Excluding the transportation-related items, the package would increase NGFO revenues by $3.738 billion in 2025–27 and by $5.641 billion in 2027–29. (The full list of resource changes is here.)

Additionally, the budget would transfer $629 million from other accounts into the NGFO in 2025–27, including $288 million from the public works assistance account (in addition to the PWAA transfers in the transportation-related revenues), $110 million from the state treasurer’s service account, and $89 million from the Washington student loan account.

The proposal would leave an unrestricted NGFO ending balance of $673 million at the end of the outlook period. This is a lower ending balance than in either the House-passed or Senate-passed budgets, but it is still higher than normal. Appropriately, the proposal assumes the revenue forecast instead of 4.5% revenue growth in 2027–29. However, the proposal assumes higher reversions (appropriations that are not expected to be spent) than normal (and higher than in either the Senate- or House-passed proposals). If those reversions aren’t realized, the budget might not balance in either 2025–27 or 2027–29.

The proposal would not use the budget stabilization account (BSA, or the rainy day fund) for general spending.