The Legislature addressed a historic budget shortfall and is now shifting to interim tasks.
The Washington State Legislature adjourned Sine Die around 6:00 p.m. on April 27, concluding a 105-day session marked by significant fiscal and policy challenges. Lawmakers were tasked with passing balanced biennial operating, capital, and transportation budgets while advancing policy priorities in the face of a projected $16 billion shortfall in the operating budget and declining transportation revenues.
Throughout the session, legislators navigated complex issues including housing affordability, law enforcement recruitment and retention, traffic safety, and more—all within the context of a gubernatorial transition. The 2025 session was the first under Governor Ferguson, who took office earlier this year. While the session progressed swiftly, the Governor weighed in on key tax policy matters, including a request that the Legislature fund a $100 million commitment to law enforcement over the biennium.
New Revenue
To address the operating budget gap, lawmakers implemented approximately $5 billion in programmatic reductions over the next four years and adopted a suite of new revenue measures expected to generate nearly $9 billion during the same period. By law, the Legislature must adopt a balanced budget; the taxes and cuts adopted this session are expected to close the shortfall. Major components of the new revenue package include:
- HB 2081 – Business & Occupation (B&O) tax adjustments, projected to generate approximately $5.623 billion over six years;
- SB 5813 – Modifications to tax rates, capital gains, and estate taxes, projected to raise approximately $635 million over six years;
- SB 5814 – New excise taxes on services and nicotine products, anticipated to generate approximately $2.68 billion over six years.
In addition, the Legislature enacted several new and increased taxes to offset the transportation budget shortfall. A result of declining revenues and escalating costs, new revenue totals approximately $3.2 billion over the next six years. Lawmakers also approved the transfer of one-tenth of one percent of the state sales tax to the multimodal transportation account. This transfer will begin in the 2027–2029 biennium.
Remembering Senator Bill Ramos
The final days of the session were marred by tragedy with the unexpected passing of Senator Bill Ramos (D-5th LD). The GTH team extends our deepest condolences to Senator Ramos’ family. We honor his longstanding commitment to public service in Washington State.
Interim Activities
With the session now concluded, attention is shifting to interim priorities. Legislative committees will soon reconvene to examine key issues and begin laying the groundwork for the 2026 session. These meetings offer the public an opportunity to learn more about evolving policy priorities and forthcoming legislative initiatives. Keep an eye on legislative committee meeting schedules for more information. You can also tune to the GTH blog for updates this summer.
Looking ahead, legislators appointed to fill vacancies in late 2024 or early 2025 must stand for election in November to retain their seats. Filings for special elections are already underway as the political landscape begins to take shape for next session.
