Most legislation that didn’t reach the House or Senate floor by 5 p.m. yesterday are dead for the year. It's a key turning point, where the universe of bills under consideration narrows. In the coming weeks, we will be watching closely House and Senate budget proposals and how they impact the essential services requested in this year’s 2026 Legislative Priorities.

As of today, there are 22 days to go in the session.

Monday’s Revenue Forecast Helps a Little

The Legislators and their budget writers finally got some good news Monday, one that will somewhat lesson the pain as they prepare their spending plans.  Revenue collections are predicted to increase $827 million in this current two-year budget compared to last November’s expectations, based on analysis from the state’s Economic and Revenue Forecast Council. This 1.1% increase reflects early proceeds from the set of tax increases the Legislature approved in 2025. This means projected collections for the current biennium are up $438 million from the numbers lawmakers used to craft the difficult state budget last spring.

The Forecast Council noted that inflation, personal income and gross domestic product appeared to increase slower than in past years. But taxable sales grew through the first three quarters of 2025, a good sign for the state’s finances as those proceeds fuel much of the budget. 

The Legislature still has difficult decisions to make. Governor Ferguson’s released December budget proposed making $800 million in spending cuts, withdrawing $1 billion from the state’s rainy day fund, and using climate dollars to pay for the Working Families Tax Credit.

Senate Passes “Millionaires” Income Tax that Includes a Significant Charitable Deduction

On Presidents Day, state Senators passed legislation to create an income tax on those earning over $1 million a year. After more than three hours of debate, the measure passed with a 27-22 vote. Now, the legislation heads to the House where debate will continue.

Significantly for United Ways and their partner nonprofits, the passed bill allows wealthy taxpayers to deduct up to $100,000 per individual or household their state income tax. It also expands eligibility for the Working Families Tax Credit to include persons who are at least 18 years of age and who meet other eligibility requirements.

Additionally, the bill also repeals sales taxes on certain specified services passed last year and expires a B&O surcharge on businesses with gross income in excess of $250 million a year earlier and increases the B&O tax credit for small businesses.

Note that if passed by the full Legislature and signed by the Governor, this new tax will not collect taxes until next year and will not effect revenue for this coming budget year soon to be debated. It will also very likely go into court appeals.

Imagination Library Bill Passes Senate

SB 5961, shifting state oversite of the Imagination Library of Washington from the Department of Children, Youth and Families to the Office of the Superintendent of Public Instruction passed the full Senate by a vote of 32-17. Now, it moves to the House where it will be first in front of the Education Committee. Constituents can take action HERE and urge lawmakers to support this Bill, along with Imagination Library of Washington's $2.75 million funding request to keep the statewide program operable for year two of the biennium.