Legislators unveil $77.9 billion negotiated budget deal as Republican continues to blast process

OLYMPIA – Following weeks of negotiations, legislative budget writers unveiled their compromise two-year operating budget Saturday morning, calling on the state to increase taxes by approximately $9 billion over four years and spend $77.9 billion over the next two.

The plan calls for $5.9 billion in cuts, over the next four years, and $8.7 billion in new revenue. The budget comes as writers work to address a deficit around $12 to $16 billion over the next four years.

While each chamber previously adopted their own budget, Gov. Bob Ferguson scuttled the plans, telling legislators that they relied too heavily on an unproven wealth tax to raise revenue.

“Washington’s families must budget to the actual salaries of their family members,” Ferguson said during an April 1 news conference. “The state of Washington, as long as I am governor, will do exactly that.”

Citing concerns from the impacts by the federal government, Ferguson said last week that a new plan to raise $12 billion in new taxes was “unsustainable, too risky and fails to adequately prepare Washington state for the crisis that looms ahead.”

Facing the potential for steeper cuts from the federal government and the impact of tariffs, Ferguson said in an April 17 statement that Washington’s budget may soon turn from “challenging” to “dire.”

“We must ensure Washington is in the best possible financial position to weather more cuts and damaging economic policies from a Trump Administration that weaponizes funding to punish those it disagrees with and forces them into compromising their values,” Ferguson said .

Ferguson has said the Legislature could not adopt a budget that relies solely on cutting spending, which he said would result in cutting “core services” provided by the state but has not indicated how much in new tax revenue he would support.

Revenue proposals introduced by Democrats include increasing the capital gains and estate tax rates on wealthy residents and raising business and occupation tax rates.

The proposed increase to the B&O tax calls for an increase in the rates paid by wholesaling and manufacturing, retail businesses, printing materials and research, and development by nonprofits, among other industries, and could bring in an additional $5.6 billion over the next four years, according to a fiscal note published Friday.

While the latest budget includes billions in savings identified by the governor, state workers would not be required to take a monthly furlough for the next two years, a cost-saving measure previously proposed by Ferguson. The proposal would also fund the collective bargaining agreements negotiated by state employees.

“The state needs to be a model employer. We need to project outward to the rest of the state what it looks like to appreciate the work that people do, compensate them fairly and keep them employed,” Rep. Timm Ormsby, D-Spokane, chair of the appropriations committee, said. “We want to keep the good people we have in state government.”

The state would also avoid tapping into its rainy-day fund, a proposal the governor has opposed. Under the budget, the state would end 2027 with $2.3 billion in reserves and end 2029 with $3.6 billion.

The budget includes a $100 million grant program for local police agencies to hire more officers, a proposal the governor said in his inaugural address would need to be included in any budget he signed.

With the end of the session looming Sunday evening, both chambers could vote on the budget proposal as soon as Sunday morning.

Sen. June Robinson, D-Everett, chair of the Ways and Means Committee, said the budget addresses “the fiscal challenges that we have and continues to fund core services that the people of Washington expect us to fund and depend on.”

Robinson acknowledged that the budget, coupled with other revenue increases including the state’s gas tax, Discover Pass and hunting licenses, could ultimately lead to a slight increase in the cost of living, but argued it was necessary to fund the services on which residents rely.

“That’s the hard job of governing, trying to find the balance between funding the needs of our state with the services and programs that people depend on and rely on, and finding ways to pay for it,” Robinson said. “I believe that we’re doing that in the best and most responsible way possible given all of the circumstances that we have in front of us.”

The budget, which was largely negotiated by Democratic lawmakers, drew the ire of Sen. Chris Gildon, R-Puyallup, the lead Republican budget writer, who has long expressed frustration about being shut out of the process.

“I honestly believe that it brings shame on the legislature for doing it this way, and it brings shame on the people of Washington state,” Gildon said. “It should not happen this way.”

Gildon said the Saturday morning committee meeting was the first time he had seen the 1,366-page budget that lawmakers will be asked to vote on in the next 24 to 36 hours.

Ormsby said the process the budget was negotiated through has taken place throughout his time in the Legislature, regardless of which party has been in the majority.

“This is about getting the job done on a strict timeline. You’ll see a very aggressive cutoff calendar, which we adhere to,” Ormsby said. “And here we are at the end of a very difficult legislative session with a product in hand.”

While the budget includes many of the proposals and suggestions put forth by the governor, Ferguson has largely avoided discussing the budgeting process publicly.

In a statement Saturday, Ferguson said he was “pleased the budget includes my request for the $100 million grant program to hire more law enforcement, maintains our rainy-day reserve fund so we are prepared for the chaos of the Trump administration, and increases our investment in K-12 education.

“That said, I will be carefully reviewing the budget after it is adopted by the Legislature. I appreciate the hard work of legislators to finish the session on time.”