This week I saw an internet ad from the No on I-645 campaign that claims, “If passed, I-645 would blow a $13 billion hole in the state budget.” This is inaccurate and reflects a misunderstanding of our state budget.

First, where is the “$13 billion” figure coming from?

There’s no source listed, but a TV ad that uses the same number cites the fiscal note for SB 6346, which is the income tax bill. That fiscal note estimated that the income tax itself would increase revenues by $2.698 billion in 2027–29 and by $6.899 billion in 2029–31—a four-year total of $9.597 billion.

Perhaps the campaign meant to cite the fiscal impact statement for I-645? It estimates that repealing the income tax would reduce revenues by $3.108 billion in 2027–29 and by $8.324 billion in 2029–31—a four-year total of $11.432 billion.

The only plausible explanation is that they are using the estimates in the fiscal note for the income tax bill for FY 2029, 2030, 2031, and 2032, which would be the first four years of income tax collections. (The argument against I-645 that will appear in the voters’ pamphlet claims the measure “cuts funding . . . by $13 billion over four years.”)

Second, if that’s the case, lumping in the estimated revenue impact for 2032 is odd. It’s true that four-year periods are important in Washington’s budget process, but it is specific four-year periods that matter—not any random four years.

Washington adopts budgets for a two-year biennium. The budget for the current biennium, 2025–27, would be unaffected by I-645 (except that some implementation spending would no longer be necessary). No current appropriations rely on income tax revenues. However, the Legislature is required to balance each budget in the current and ensuing biennium (the four-year balanced budget requirement). Consequently, the current budget for 2025–27 balanced through 2027–29 (FY 2028 and FY 2029). When the Legislature writes the 2027–29 budget next year, it will have to balance through 2029–31 (FY 2030 and FY 2031).

FY 2032 will be the first year of the 2031–33 biennium, so it does not make sense to include the 2032 revenues in a discussion of the imminent budgetary impacts of the initiative.

Third, as noted above, the Legislature has not yet written a budget that relies on income tax revenues, so there’s nothing to blow a hole in.

The current budget balanced over four years thanks in part to $2.698 billion in assumed income tax revenues in 2029. But the outlook’s estimated spending in the second biennium does not automatically become the actual budget bill for 2027–29. The Legislature will write a biennial budget that might look quite different from the prior outlook. When the Legislature does so, it will know the results of the November election and it will write a budget that balances within existing resources.

For context, under the June revenue forecast, if the income tax is repealed (but the tax relief provisions remain in law), revenues would be $79.466 billion in 2027–29, an increase of 4.2% over 2025–27.

If I-645 passes, it would make it harder for the Legislature to balance the next budget, since the current budget assumed they would have $2.698 billion in income tax revenues to work with in 2027–29. But that’s a far cry from $13 billion.

(Our brief on I-645 is available here, and our brief on ESSB 6346 is available here.)