Washington lawmakers are considering competing supplemental budgets for the 2025–27 biennium, highlighting differences over spending priorities, reserve levels, and potential new taxes on high earners. The Senate proposes a $79.4 billion budget with $2.3 billion in new spending for health care, public services, and legal liabilities. Funding would come in part from a future tax on income over $1 million and a $750 million transfer from the state’s rainy-day fund. The House’s $79.9 billion plan takes a more cautious approach, relying on existing revenue, unspent funds, and an $880 million draw from reserves, while also incorporating the proposed income tax in long-term projections.
Both plans respond to rising costs in Medicaid, public schools, childcare, and other mandatory expenses. Revenue forecasts show slightly higher collections than expected, about $200 million more over six years, but mandatory cost increases of nearly $3.7 billion over four years outweigh these gains. Senate leaders note that spending also reflects inflation, legal obligations, and ongoing program costs. Key items include $1 billion through 2029 to strengthen the state’s Self-Insurance Liability Account and $190 million for long-term care for roughly 3,000 residents who are lawfully present but not U.S. citizens.
Revenue strategies differ between chambers. The proposed income tax could eventually generate $3.5 billion annually, with about $2.3 billion projected for the general fund by 2029 under the Senate plan. Funds would support tax credits for working families, small business tax relief, and hygiene product exemptions. Both chambers also plan transfers from capital gains, public works accounts, and other sources to balance the budget.
Lawmakers must now reconcile the proposals, finalize policy measures, and pass a supplemental budget by March 12. Key decisions include whether to adopt the high-earner tax and how much to maintain in reserves, balancing immediate needs with long-term fiscal stability.
