Statement from Executive Director Eli Taylor Goss 

On April 27, the 2025 legislative session wrapped up. Detailed analysis takes time, and the Washington State Budget and Policy Center will spend the coming weeks delving into the data and producing a thorough analysis of the state budget and our legislative priorities. However, we already have the information to answer the major questions about what happened this session.  

Going into session, our state faced a budget shortfall of $12-$16 billion. Early on, it was clear that cuts to vital programs like food banks and child care, as well as furloughing state workers, were all on the table as ways to balance the budget. We and our partners advocated for progressive forms of revenue that would finally require the wealthiest and large corporations to pay their share of taxes so that Washington state lawmakers can develop a budget that meets our state’s growing needs. 

In the final budget, legislators passed $9 billion in new progressive revenue, coming from improvements to the capital gains tax and additional progressivity in the estate tax. It also included broad increases to Washington’s business and occupation (B&O) tax that could end up being regressive because of the ways businesses might pass costs on to consumers. Despite the drawbacks to the B&O tax, this mix of revenue sources will nevertheless help keep many services and state resources intact and avoid state employee furloughs. This is good news, and we are grateful to the legislators and advocates who fought hard to prevent across-the-board cuts.  

But we can’t take a victory lap. We must be honest and acknowledge that the final budget still includes $7-$8 billion in cuts, rivaling the $10 billion in cuts made by the legislature and then-Governor Christine Gregoire following the Great Recession. Cutting billions from state services, health care, and education instead of passing additional progressive taxes does not prepare Washington state to have the revenue our state will need when Congress finalizes a federal budget deal.  

We know there will be much work ahead in the coming years to re-invest in the programs and communities that were forced to bear the brunt of the budget crisis. Cuts to abortion programs to the tune of $17 million, including the largest cut to the Abortion Access Project in the state’s history, come at the worst possible time given attacks to reproductive justice. And cuts to early learning total $1 billion, including a reduction in 3,000 part-day Early Childhood Education and Assistance Program slots and increased copays for Working Connections Child Care. These and so many other cuts will be especially harmful for families already struggling to stay afloat amid skyrocketing costs of living. 

The original progressive tax package proposed by lawmakers earlier in session smartly included a payroll tax on employers of the wealthiest earners as well as a wealth tax, and it could have generated over $21 billion in revenue. This would have prevented most of these budget cuts and shored up the revenue we will inevitably need in the coming years as the Trump administration enacts cuts to Medicaid, housing, and other critical programs. 

It was incredibly frustrating to see corporate lobbyists and multimillionaires descend on Olympia, advocating to maintain our inequitable tax code that over-relies on people with low incomes. We watched as Governor Bob Ferguson and lawmakers agreed to special carve-outs for some corporations, watering down the most progressive revenue proposals, and asking for cuts to the budget rather than keeping communities funded. What was once $21 billion in much-needed revenue dropped to $12 billion and finally to $9 billion.  

Governor Ferguson defended his decision to scale back the thoughtful revenue package crafted by the Democratic caucus. He said it’s “too risky” to address our tax code. That’s just not true. Now is exactly the time to fix the tax code. For far too long, working-class, everyday people in Washington have footed the bill. We are watching the wealthiest continue to build their bank accounts, while simultaneously seeing regular families lose their jobs, struggle to afford housing, and stress about paying their bills.  

As difficult as this session was, the final revenue package contained a couple of key progressive revenue wins that we are excited to see. We are pleased with tweaks to the capital gains tax and the additional progressive adjustments to the estate tax.  

At the same time, we are disappointed to see Washington continue to grow its reliance on a flawed and regressive B&O tax, sales tax, and property tax that do not account for one’s ability to pay. The fact that Boeing, oil refineries, and tech companies were successful in receiving special carve-outs from the B&O tax is unconscionable while so many in our state are struggling just to get by. It is even more disappointing when you consider they are poised to get massive federal tax breaks.   

So what happens now? We will watch closely as Governor Ferguson considers line-item vetoes that stand to jeopardize new revenue and force a special session. We urge him to sign the budget as is. 

Vetoing new revenue in the budget would present a near-impossible bind for lawmakers. They would either need to seek billions more in cuts to communities or turn to raising other regressive taxes that harm people with low incomes, like the sales tax. This would present a devastating lose-lose situation for everyday Washingtonians, all while the ultra-wealthy continue to get richer. 

We hope that together we can seize on the missed opportunities of this session and build the momentum for the next session to ensure lawmakers pass the revenue we need. Sustainable solutions are right in front of us. It’s time to pass truly progressive revenue solutions like establishing a high-earner payroll tax on employers, implementing a robust wealth tax, and making desperately needed progressive reforms to the property tax system. 

We are hopeful that legislators and the governor will hear from their constituents who are tired of balancing budgets on the backs of working families. Voters have already demonstrated that they are hungry for the wealthiest to finally pay their share. They need a budget that enables everyday people to live lives of joy, dignity, economic security, and self-determination.