Washington state lawmakers have long warned of the potential for a budgetary crisis during an economic downturn, even as the state experienced record-breaking revenue growth over the past decade. Today, those warnings have some merit, as the state faces an estimated $10 billion to $12 billion deficit despite maintaining all-time high revenue levels.
Since 2013, Washington’s state operating budget has surged from $38.4 billion to $75.5 billion for the current biennium—an increase of $37 billion, nearly doubling spending. Much of this spending escalation can be traced to the Legislature’s efforts to comply with the state Supreme Court’s 2013 McCleary decision, which mandated fully funding basic education as a constitutional obligation. Between 2015 and 2019, the operating budget expanded from $38.2 billion to $52.8 billion, a 38% increase that excluded supplemental budgets.
K-12 education received a significant funding boost during this period. From the $17.7 billion allocated in the 2011-2013 biennium, investments in public schools grew to $28.7 billion by 2019, representing a 62% increase. Current budgets allocate $32.4 billion to public education. The Washington Policy Center reports notable staffing growth since 2011, including a 25% increase in teachers, a 42% increase in school principals, and a 66% rise in non-teaching staff.
However, spending growth accelerated further between 2019 and 2023, with the operating budget increasing by 38% from $52.8 billion to $69.8 billion. This expansion was funded through a combination of new taxes and unexpected revenue windfalls. In 2019, the Economic and Revenue Forecast Council (ERFC) projected $50 billion in revenue for the 2019-21 biennium—$5 billion more than the previous biennium. By 2021, ERFC reported an additional $3.5 billion in unanticipated revenue.
Despite surplus revenue, sustainability concerns were a point of contention among lawmakers. Sen. John Braun (R-Centralia) observed in 2019 that the state’s financial position was strong, allowing for increased spending without new taxes. Conversely, House Appropriations Chair Timm Ormsby (D-Spokane) argued that surplus revenue alone was insufficient to meet commitments, calling for additional revenue measures.
In response, the 2019 Legislature passed a series of new taxes, including:
- Senate Bill 5993: Increased the hazardous waste tax.
- House Bill 2158: Imposed a business and occupation (B&O) tax surcharge for higher education funding.
- House Bill 1873: Taxed vaping products.
- Senate Bill 5998: Transitioned the real estate excise tax to a graduated rate.
- House Bill 2167: Added a 1.2% B&O tax on certain financial institutions.
These taxes drew criticism from Republican lawmakers, who argued they were rushed through without sufficient review. Rep. Drew Stokesbary (R-Auburn) expressed concern over the sustainability of such spending growth, urging that surplus funds be used to build reserves. During the 2020 session, he proposed a $1.14 billion tax relief plan, which was rejected, as was a similar proposal by Rep. Jim Walsh (R-Aberdeen). Stokesbary warned that failing to prioritize tax relief during times of prosperity would lead to challenges in supporting working families during economic downturns.
The current deficit underscores the long-term concerns raised by fiscal conservatives, as debates over spending priorities and revenue strategies continue to shape Washington’s financial future.
