We are entering the final week of regular session – sine die is this coming Sunday April 27. Our Legislature has a lot to accomplish in the coming days, especially due to their goal of balancing difficult funding cuts with new tax revenue options.  Both actions are still very much in play.  Until the revenue picture is clarified, spending option remain uncertain.

New Revenue Approach Released
Following Governor Ferguson’s early April insistence that he couldn’t support an uncertain “wealth tax”, legislative budget writers last week unveiled a revised revenue package that is estimated to raise $12 billion over four years. As a reminder, the state’s four-year budget gap is an estimated $16 billion.

This Washington State Standard article summarizes this revised legislative approach.

Five main pieces make up the revised Senate and House revenue packages:

  • SB 5812 /HB 2049  K-12 Education Funding/Property Tax
  • SB 5813 /HB 2082 Increase Funding to the Education Legacy Trust Account/Capital Gains & Estate Tax Increases
    • Adds an additional 2.9% excise tax on capital gains in excess of $1M and increases the top tier rates on estate tax by 35% and increases the exclusion amount for the estate tax to $3M
  • SB 5815/HB 2081 Increase Business & Occupations (B&O) Tax
    • Increases tax rate for several Business & Occupations (B&O) Tax Surcharges
    • Imposes surcharge on high grossing businesses and financial institutions
    • Places a .5% tax on Washington taxable income over $250M. Takes effect January 2026 and expires December 31, 2030
  • SB 5814/HB 2083 Extend Retail Sales and Use Taxes to Certain Services
    • Extends retail sales and use tax to certain services
    • Establishes one-time pre-payment of state sales tax collections for businesses with $3M or more in taxable retail sales during calendar year 2026.
  • SB 5794/HB 2084 Repeal or Modification of Certain Tax Preferences
    • These bills repeal, modify or clarify a number of tax exemptions to raise additional revenue

The Senate Ways and Means Committee took executive action on Friday, April 18 and will continue action on April 22. The House Finance Committee debated and took executive action on Friday, April 18 and Saturday, April 19.  Both committees are back at it in the coming two days.

All of these revenue bills are “Necessary to Implement the Budget,” and, therefore, not subject to legislative timelines, but still need to go through all the normal channels and be approved by both bodies.

Last Wednesday, Governor Ferguson issued his response to the revenue package. Of note, he expressed concern that the Legislature’s approach continues to rely on too high a level of new revenue. He provided no details as to the balance he seeks.

That said, the Legislature has made progress on key issues in its updated revenue proposals. Legislators are working hard and putting in long hours. They have moved away from their reliance on an untested wealth tax and made progress on addressing our regressive tax system. In the coming week we will see what happens…stay tuned.

Imagination Library in Washington Still Needs Your Advocacy
With the end of this year’s legislative session on the horizon, your Legislators still need to hear your urgent and heartfelt request to allocate $2 million in the 2025–2027 biennium to help sustain Dolly Parton’s Imagination Library in Washington. ($7 million was initially requested to fully cover monthly costs and expected enrollment growth.)

Washington’s 50/50 public-private partnership—matching state funds with local community contributions—makes it possible to sustain and grow this impactful program by covering the cost of books and mailing, ensuring enrolled children in all 39 counties continue to receive their free, high-quality books each month.

Since Washington demonstrated its commitment to early literacy by establishing the Imagination Library of Washington in 2022, more than 121,000 children have been enrolled in the Imagination Library. Without state support, our Imagination Library is in dire danger of ending. Please contact your Legislators today through the action button below!