WA faces multi-billion dollar deficit after years of spending
WA faces multi-billion dollar deficit after years of spending
Some Washington Democrats say a wealth tax is a solution to the state's multi-billion dollar budget deficit. However, there is still no consensus on what the exact deficit is or a clear analysis of how the state got to where it's at.
OLYMPIA, Wash. - By now you may have heard that Washington state is facing a budget deficit in the billions.
There is already a push by some Democrats who say a wealth tax is a solution. However, there is still no consensus on what the exact deficit is or a clear analysis of how the state got to where it's at.
Billions of dollars in the hole
Budget timeline:
Just about a year ago, state finances looked rosy.
In March 2024, Governor Inslee approved an extra $2 billion to a $69.8 billion operating budget. Then, eight months later, in November, the Office of Financial Management sounded the alarm by stating it would be $10 to $12 billion in the hole over the next four years.
A month later, that number jumped to $16 billion, announced by Inslee himself, who said the deficit was even greater than first projected. At the same event, Inslee also said there was no recession and Washington’s economy was very strong.
The Office of Program Research and Senate Committee Services recently estimated that the deficit could be closer to $6.7 billion, but that number could be higher if they considered new spending.
FOX 13 Seattle reached out to the governor's office for clarification and an estimate of what the new governor believes the deficit is.
In an email, the governor’s office said "they believe the budget deficit is more than $12 billion over four years. But they hope to have a better idea by March 18th when the revenue forecast comes down."
"Even people who are in office, leaders in Olympia are saying different numbers," Enterprise Washington President Paul Graves said.
Non-profit launches website to educate public
Education is key:
Enterprise Washington, a non-profit, is jumping in to educate the public about the budget.
It launched budgetbreakdown.org, a site with publicly sourced data, and analyzed state spending going back a decade.
"Three years ago, the state had a $14 billion surplus," Graves said. "In those three years, the economy has been good and strong. In just the last four years, the state has taken in 25% more in taxes just over the course of the last four years. And so, it's hard to get it all to add up."
Enterprise Washington says the reason for the deficit is in part that state spending went up around 40% in the last four years.
"You could still be in a deficit because the state is spending substantially more than it used to … substantially more," Graves said.
Tracking state budget, spending over 10 years
By the numbers:
Over the last decade, the median income for a household has gone up 55%; state taxes collected are up 99%; and state spending has increased by 114%.
In 2013, state taxes were $17.8 billion compared to $35.4 billion in 2023.
State spending was $33.6 billion from 2013 to 2015. By 2025, it had jumped to $72 billion.
Those numbers are from Enterprise Washington, and they are also looking to the future. The non-profit says in the next four years, the state is projected to collect $10 billion more in tax revenue while spending will outpace that by $12 billion.
Graves says there are other variables that can complicate the budget outlook. For example, the state took in billions in federal aid dollars during the pandemic. The question now: are some of those programs considered one time or ongoing?
"We are not taking any stand on any piece of legislation or spending or taxes," Graves said.
Enterprise Washington usually advocates for the business community at large. This time around, they say their budget website is not about pushing or blocking any specific legislation. Instead, they want to encourage the public to pay attention to the people they put in office and how they are spending taxpayer dollars.
WA Gov. Inslee imposes state spending freeze
In December, Gov. Jay Inslee issued a directive commanding state agencies put a hold on hiring certain positions. This includes positions not related to public safety or other non-discretionary activities.
Editor's note: At time of publication, FOX 13 Seattle did not have a statement from the governor's office. The story has since been updated.
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