Legislature completes work on time as focus turns to governor

OLYMPIA – The Washington Legislature called it a wrap Sunday, a session many around the state Capitol have described as among the most challenging they’ve faced.

Legislators have navigated difficult waters over the past three and a half months as they dealt with the state’s first new governor in a dozen years, a severe budget deficit and the unexpected loss of a beloved lawmaker.

Facing a multibillion-dollar budget hole, the state’s financial outlook has loomed large, particularly after an updated revenue forecast showed the state would bring in nearly a billion less revenue over the next four years than initially anticipated.

In a lengthy statement Sunday evening, Gov. Bob Ferguson thanked legislators and his team for their work and said he would carefully review the budgets the Legislature passed in the coming weeks, at which point he would provide more in-depth comments.

“Beginning with my inaugural address, I’ve emphasized that we must use realistic revenue projections, preserve our Rainy Day Fund reserves, find billions of dollars in savings and efficiencies, include a $100 million grant program for more law enforcement officers, increase investment in affordable housing, and increase the percentage of our budget devoted to K-12 education,” Ferguson said. “The budgets adopted by the Legislature accomplish those goals.

Here’s a look at some of what did – and didn’t – find support among state lawmakers and some of the other hot topics lawmakers have focused on over the last 105 days.

A budget deal

While whispers of the potential for a special session have been murmured in the halls of the Capitol for weeks, lawmakers announced a budget deal on Saturday, which calls for 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, many of which were proposed by Ferguson.

The plan includes an increased B&O tax rate paid by wholesaling and manufacturing, retail businesses, printing materials and research, and development by nonprofits, among other industries.

The state also avoided 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 2029 with $3.6 billion.

“Throughout this budget process, I have also insisted that the Legislature take a balanced approach to solving the $16 billion shortfall. That is why I rejected an initial proposal to raise $21 billion in taxes. I then rejected a subsequent $12 billion tax proposal as unsustainable,” Ferguson said. “I appreciate that the Legislature heard my concerns and dramatically reduced the revenue assumed in the final budget. That said, I intend to carefully review all revenue increases.”

A cap on rent and a push for more housing

On Friday, lawmakers announced a compromise to cap yearly rent increases at 7% plus inflation or 10%, whichever is less, each year. Under the cap, new construction will be exempt for 12 years, as will affordable housing managed by nonprofit organizations and public housing authorities.

Landlords also will be required to provide a 90-day notice of rent increases.

“The No. 1 issue in this state is affordability, and as everyone knows, housing is the single greatest cost in a household budget,” Sen. Emily Alvarado, D-West Seattle, said in a statement. “This bill is a simple guardrail for the many renters in this state who just want to make sure that they can have a little bit of control in that household budget and plan and save. Moving this bill forward is a real step to provide people with stability and predictability in their lives.”

The capital budget includes $605 million, a record, for the construction of affordable housing projects through the Housing Trust Fund. Lawmakers also passed legislation they say will reduce red tape and cut construction costs, which they hope will spur the construction of more housing in the state.

More money for more police

As he outlined his vision for the state, Ferguson expressed support for a proposal from Sen. Jeff Holy, R-Cheney, to establish a $100 million grant program to hire more police officers, saying that the “idea was a cornerstone of my campaign for governor.”

“Any budget I sign must include this funding,” Ferguson said.

In a statement Sunday, Ferguson said he was “especially proud” of the legislation.

“Getting $100 million grants in the hands of local law enforcement agencies to help them hire well-trained officers was a key piece of my campaign for governor,” Ferguson said. “The final bill represents an important step forward in our work to improve public safety for all Washingtonians.”

On Sunday, Holy told The Spokesman-Review that he was appreciative of the governor “initiating” discussion of the plan.

“This is really a good thing, and this point, that we’re paying attention,” Holy said. “Gov. Ferguson is actually paying attention to the purpose of government, which is refreshing.”

Transportation budget sputters

According to the lawmakers who drafted the state’s transportation budget, a lack of adequate funding became apparent within weeks of the process beginning, largely thanks to a decline in revenue from the state gas tax.

If legislators opted to balance the budget through cuts, the capital projects budget would have been reduced by $941 million and state agency operating costs would decrease by $156 million over the next two years, putting projects across the state, including the North Spokane Corridor, at risk of delay.

While a proposal to implement a pay-by-mile program to raise more revenue was previously floated, lawmakers opted to instead raise the state’s gas tax by 6 cents.

“This transportation budget is a reflection of our shared commitment to keeping Washington moving – safely, sustainably, and equitably,” Liias said in a statement Sunday. “We’re investing in the essential infrastructure that connects our communities, supports our economy, and prepares us for the future. I’m proud of the collaborative work that brought this budget together, and I look forward to seeing these investments deliver real results for Washingtonians.”

The North Spokane Corridor remains on track to open by 2030.

Universal free school meals fall flat

While the Legislature adopted many of the policies promoted by Ferguson, it failed to pass a universal free school meal program the governor traveled to Spokane to promote.

During a February Senate Education Committee hearing, Chair Lisa Wellman, D-Mercer Island, indicated that the proposal could take money away from other programs to provide meals to students whose families could otherwise afford to pay.

Lawmakers also provided more money to cover school transportation, special education and a category called MSOC, which stands for materials, supplies and operating costs, with education officials favoring those policies in lieu of an expanded meal program.

Sponsor Sen. Marcus Riccelli, D-Spokane, told The Spokesman-Review Sunday he plans to bring the proposal forward again in future sessions.

“Until every kid has a meal, and we can ensure that they’re getting the sustenance they need to thrive in the classroom, we’ll continue to bring it back,” Riccelli said. “We’re not going to stop until every kid has access to school meals.”

New federal administration

As President Donald Trump returned to the White House, state lawmakers have frequently expressed a need to further insulate Washington from any impacts the state may face.

Soon after taking office, Ferguson established a family separation rapid response team to recommend, protect and aid families of undocumented residents who face deportation.

“The members will be consulting with regional and local experts on immigration and child welfare to develop policies that support children who experience family separation through the deportation or detention of their parents or their caregivers,” Ferguson said during a Jan. 27 press conference.

Ferguson also frequently cited impacts from the federal government’s push to cut spending as a reason for state lawmakers to take a more cautious budget approach.

Sen. Patty Murray traveled to Olympia last month, where she was joined by state lawmakers, to warn that billions of dollars in cuts to Medicaid would have a devastating impact on the Washingtonians who rely on the program, particularly in rural and Eastern Washington.

“It would rip a hole in the budget and would make it so we have to face extremely difficult decisions, like keeping rural hospitals open,” Riccelli said of potential cuts. “And as those rural hospitals close, and those services are cut, that pressure gets put on the urban areas, including my district. It’s all connected.”

Lt. Governor Denny Heck has shown concern, too, particularly after Trump announced a plan to implement far-reaching tariffs.

Heck said that there was “no way to have this material of an increase in tariffs without it damaging our state’s economy, and in fact, disproportionately, because we are more trade-driven than the other 49 states.”

Attorney General Nick Brown has also frequently clashed with the Trump administration, filing at least 12 lawsuits against the federal government. As he announced his 11th lawsuit, which challenged the president’s attempt to impose federal control over elections, Brown indicated that more would likely come.

“I’m sorry to say, at the rate this is headed we will have more cases in the future,” Brown said.