Washington state lawmakers focus on money woes as they consider cuts — and maybe taxes — to balance budget

Mitchell Roland / The Spokesman-Review (TNS)
Posted 1/12/25

There is little doubt what the top concern is for lawmakers on both sides of the aisle as they prepare to start Washington's 2025 legislative session this week: solving the budget deficit.

A …

You've reached your limit of
free articles this month!

Unlock unlimited access for just $1 for your first month

Click here to start a digital subscription

Please log in to continue

Log in

Washington state lawmakers focus on money woes as they consider cuts — and maybe taxes — to balance budget

Posted

There is little doubt what the top concern is for lawmakers on both sides of the aisle as they prepare to start Washington's 2025 legislative session this week: solving the budget deficit.

A month after outgoing Gov. Jay Inslee proposed a wealth tax he said could raise approximately $10.3 billion in new revenue, and a day after Governor-elect Bob Ferguson suggested approximately $4 billion in cuts, it's no surprise that the state's finances are at the top of mind for many as they return to Olympia.

Currently projected at around $12 billion over the next four years, legislators from both parties said that finding savings will be key as lawmakers look to close the gap in the coming months.

Ahead of the session's start, The Spokesman-Review talked to a half dozen lawmakers from both sides of the aisle about what they want to address in the upcoming 105-day session.

Closing the gap through cuts

In November, the Office of Financial Management announced that the gap between revenues and the cost to maintain existing programs  hovers between $10 and $12 billion through 2029.

To close the gap, lawmakers have the option of either identifying areas to make cuts or raise taxes or other fees. As he prepares to enter office on Wednesday, Ferguson said his attention will turn to raising taxes only after savings and reductions have been identified and addressed.

On Thursday, Ferguson unveiled a plan he said could save the state government $4 billion over the next four years, which calls on most state agencies to make 6% budget reductions across the board. Under the plan, K-12 education, community and technical colleges, public safety agencies and entitlement benefits delivered by state agencies would be exempt from cuts, and state universities would only have to cut 3%.

"It's no different than a family budget," Ferguson said. "You've got to make your priorities, you've got to decide what's the most important. You've got to cut things you can cut. And that's what we'll be doing as a state."

In remarks Thursday, Ferguson said his focus was  on "scrubbing our budget, in detail, to find efficiencies and savings that will help address that budget shortfall."

Rep. Timm Ormsby, D-Spokane, said while  Ferguson's proposal was strong at first glance, lawmakers will focus on the details of the state's budget in the coming months, particularly after Ferguson unveils a more detailed budget proposal.

"The governor's proposal is fine on its face, but the details matter," Ormsby said. "What are the cuts? And more specifics regarding some of the spending priorities. And I appreciate that he is putting his flavor on the current situation, but we'll need to unpack the details to find out about coming to agreement on a common approach."

The $12 billion deficit figure likely will fluctuate in the coming months as lawmakers get more accurate forecasts of revenue and expenses, though several lawmakers expressed skepticism that the deficit is as high as the Office of Financial Management projects.

"From what I see, I don't think we're anywhere near $12 billion," Rep. Leonard Christian, R-Spokane Valley, said, adding that he believes the figure is closer to $5 billion.

Sen. Shelly Short, R-Addy, said the budget deficit figure is "fluid" and  "that number is still a number to be determined."

"But look, I've said over the past several years that we're spending at a greater rate than the revenue we're taking in, even though the revenue has done quite well," Short said. "The revenue has increased exponentially and continues to increase in the state of Washington. The hard part is there's programs you like, but sometimes there isn't the ability to have that program increased at that time, and you need to make sure that we're not burdening individuals and families in the state of Washington."

Short said the proposal by Ferguson was a "good first step."

"And the reason I say that is you need to take a look and should review programs. Are they being effective? Are they being efficient? Does one agency have money that it doesn't need versus another agency that might?" Short said. "Just to really do that review. To me, that makes a lot of sense, so I appreciate that being his first step. And I think a lot is going to depend on what he learns from that, and frankly, what we all learn from that."

No new taxes?

As the session nears, lawmakers from throughout Washington appear hesitant to adopt new streams of revenue to address the shortfall.

"I'm not a fan of just immediately going to taxes," Short said. "People work really hard for what they send to the state of Washington. And I think we need to do our part as well. And those may be unpopular items, but I think it all ought to be looked at, and I hope that it will."

In December, Inslee introduced a wealth tax concept for personal wealth over $100 million, a proposal he said could bring in an additional $10.3 billion, though lawmakers and the incoming governor appear skeptical of the idea.

"Regarding revenue, I am focused on identifying opportunities for savings first and will only focus on revenue after we have scrubbed the budget for savings and reductions," Ferguson said in a statement released Thursday. "I am deeply skeptical that we can rely on balancing the budget through an untested wealth tax."



Incoming state Sen.  Marcus Riccelli, D-Spokane, said legislators will have to "wrestle with those budget shortfalls" in the coming months.

Ormsby suggested that additional revenues in another form could be on the table.

"Cuts aren't our only option, but certainly reductions in spending will need to be made," Ormsby said. "But it doesn't have to be just $8 billion in cuts, and we're not even certain on the number."

Republican lawmakers, meanwhile, expressed hope that Democrats would focus on reducing spending, rather than increasing revenue.

"I'm hoping it's not just rhetoric, and that he's serious about raising taxes as a last resort," Christian said. "That doesn't seem to be the message that's coming from the majority caucus, to be honest with you. They just seem to be, 'We can raise taxes and fees and get ourselves out of this.' So I'm hopeful that Ferguson, he means what he's saying, and he's not just playing a political game."

Rep. Joe Schmick, R-Colfax, suggested that the Legislature forms a group to identify the priorities of the state government, something he said would be similar to a group former Gov. Gary Locke convened.

"They went through every program that the state did at that time and then went through a process of identifying what is the most important and what isn't," Schmick said. "I think that would be a good groundwork to utilize in working with this budget."

As a member of the Legislature during the 2008 financial crisis, Schmick said he has experience with closing challenging budget deficits.

"It can be done. It is painful, but it can be done," Schmick said. "And we will see whether the majority party wants to go through that process or not."

But Ormsby said the state should not "resort to cuts only to solve our problems."

"I'm most importantly interested in creating a just spending plan, that we leverage our available resources to target specific issues," Ormsby said. "That, to me, is the most pressing issue. There are many components within that, whether it's within the criminal justice system, within corrections, within housing, within healthcare and behavioral health. "

Legislators will tackle other non-budget concerns

While money may be hard to come by during the upcoming session, several lawmakers expressed interest in ideas that would not have a significant financial impact.

Ahead of the session, Short said she's explored strengthening training around stalking, which could include how to identify stalking and the ramifications and impacts of the crime.

"A lot of work has been done in the arena of domestic violence, and I think those are things that could certainly carry over to really helping victims feel heard and represented in the court system," Short said. "And so I'm looking forward to continuing that work. We started it last year. It's very bipartisan. And we'll see what we can bring across the finish line this year."

Schmick said lawmakers should also continue to focus on mental healthcare, particularly in rural areas where aid could be challenging to receive. Schmick, along with a group of other lawmakers, has explored reducing the rate of suicide amongst agricultural workers.

Schmick said he's also "really concerned" about access to rural hospitals in Washington.

"These folks are the ones that are delivering care every day. And when they struggle, and cannot make ends meet, they will start cutting services because they just can't afford to do things," Schmick said.

     ___

     (c)2025 The Spokesman-Review (Spokane, Wash.)

     Visit The Spokesman-Review (Spokane, Wash.) at www.spokesman.com

     Distributed by Tribune Content Agency, LLC.