WA Democrats release budget proposals for next 4 years

Washington's budget battle: Are the state reserves at risk?

Washington's Senate Democrats' bold $77.7 billion budget plan set to shake up the next two years. With concerns from the State Treasurer about draining reserves, find out how these plans could impact the state's financial future.

OLYMPIA, Wash. - Democrats in charge of the State Senate and House released their separate operating budget proposals Monday, detailing how much they will be spending over the next four years and how they will be paying for it. Though one proposed method raises a red flag for the state’s treasurer.

We focused on building a thoughtful, sustainable plan that protects the services that people need and promotes our long-term fiscal stability," Senate Democratic budget lead June Robinson, D-Everett, told reporters.

Senate Democrats are proposing the state spend $77.7 billion over the next two years, an increase of about $6.5 billion from the current two-year budget cycle.

Rep. Timm Ormsby

They attribute $4.4 billion of that increase to money needed to maintain current programs due to increased usage and inflation, while $1.6 billion represents new investments in areas like K-12 material and operating costs and special education.

Robinson said their proposal will save $6.5 billion over the next four years in part by delaying expansions to state child care programs and requiring state employees to take furlough days throughout 2026.

"Washingtonians have asked us loud and clear to look for reductions and write a balanced budget that both makes reductions as well as makes reductions and adds to revenue," she said.

Sen. June Robinson

As they await revenue from new taxes on the wealthy and sales and property tax changes they proposed last week, Senate Democrats said they plan on using state reserves in 2026 to fund the budget before refilling the accounts in the years after.

It does go low, but it quickly builds back to a strong point due to the revenue that we’re assuming," Robinson said.

Democratic State Treasurer Mike Pellicciotti has warned against using up state reserve funding, arguing that doing so could have a negative impact on Washington's credit rating and the state’s ability to respond to economic challenges on the horizon.

We are dealing with incredible uncertainty now as the state of Washington, both with the federal government, wildfires and other threats that might come our way and just economic volatility," Pellicciotti said. "It is absolutely critical that the state not drain its rainy day fund. To do so would be very dangerous toward the future financial health of our state."

In the House, the Democratic budget proposal did not touch state reserves.

Treasurer Mike Pellicciotti

While they also proposed new revenue sources and have similar amounts of spending and reductions, the proposal has slight differences from the Senate in how they are bringing in that revenue and what they are cutting.

For example, Senate Democrats propose a sales tax cut, while the House Democrats do not. Both propose a tax on wealthy individuals with high amounts of "financial intangible assets," but the House has a lower rate. On the spending reductions side, the House proposal does not include mandatory furloughs for state employees.

"We cannot abandon our public sector employees and we cannot balance the budget on their backs," said Rep. Timm Ormsby, D-Spokane. "Everything that we have fought to maintain is supported by their work and we continue to rely on their good work and want to honor that work."

Democratic representatives cited delayed expansion of state child care programs, budget reductions at colleges and universities and capping enrollment of transition to kindergarten programs as some of the driving factors in their $6.5 billion in spending reductions.

WA State Capitol

Legislative Republicans criticized Democrats for proposing new taxes, arguing they could drive away businesses and increase costs for Washingtonians.

A spokesperson for Gov. Ferguson said his office is in the process of reviewing the budget proposals.

The Democratic governor previously made it clear he wanted spending cuts first and new taxes as a last resort. Both House and Senate Democrats said they worked off his suggested spending reductions, but budget cuts alone will not balance the state budget.

"The impacts would just be too deep and too catastrophic for our communities and our kids," said Sen. Noel Frame, D-Seattle. "So we think this takes a balanced approach and we look forward to the conversation over the next many weeks."

The budgeting process continues with public hearings on the Senate and House proposals on Tuesday. The chambers will have to get together on one operating budget to pass onto the governor by the end of session on April 27.

Albert James is a television reporter covering state government as part of the Murrow News Fellowship program – a collaborative effort between news outlets statewide and Washington State University.

The Source: Information for this article comes from the Olympia News Bureau.