Several of Washington state’s leading business organizations are urging lawmakers to proceed cautiously as Democrats advance supplemental budget proposals that would increase state spending by roughly $2 billion. The plans, released this week by the state House and Senate, aim to address a projected shortfall in the 2025–27 biennium while relying on withdrawals from reserves and anticipated revenue from a proposed income tax.
The joint statement was issued by the Washington Roundtable, Association of Washington Business, Bellevue Chamber of Commerce, Seattle Metropolitan Chamber of Commerce, and Greater Spokane Incorporated. The groups warned that both proposals would continue a trend of spending growth that exceeds incoming revenue.
Lawmakers project total operating budget spending of roughly $80 billion, about $8 billion higher than the prior biennium. The plans would draw heavily from the state’s Budget Stabilization Account, commonly known as the rainy-day fund. Over the past decade, total state spending across operating, transportation, and capital budgets has nearly doubled.
Gov. Bob Ferguson and Democratic leaders have proposed a new income tax on high earners, describing it as a “millionaire’s tax.” Washington voters have rejected statewide income tax proposals 10 times over the past century. Critics argue the proposal is unconstitutional and warn it could face legal challenges that delay or block implementation.
Sen. June Robinson and Rep. Timm Ormsby, who lead operating budget efforts in their chambers, have described the proposals as maintenance-level spending. Robinson said lawmakers faced difficult trade-offs and viewed additional reductions as untenable.
House Republican Budget Leader Travis Couture criticized the approach, accusing Democrats of draining reserves without addressing underlying spending growth. He warned that taxpayers will ultimately bear the consequences of continued expansion.
Under current projections, the budget balances through 2027 but could face deficits approaching $900 million in 2028 before returning to surplus in 2029. Revenue assumptions depend in part on income tax collections beginning in 2029, projected at $2.5 billion initially and rising above $3.3 billion in subsequent years. A court injunction or economic downturn could significantly alter those figures.
Business leaders emphasized the importance of long-term sustainability, economic growth, and affordability. They cautioned that higher business taxes could ripple through the broader economy and affect competitiveness if companies choose to relocate.
The debate now shifts to negotiations between legislative leaders and the governor as Washington charts its fiscal course amid economic uncertainty.
