Unpacked: Washington state’s budget deficit

By Phineas Pope and Lauren Gallup

Phineas Pope:  Washington state has a budget deficit and some state employees are worried. NWPB’s Lauren Gallup joins me now to talk more. Hi, Lauren. 

Lauren Gallup: Hi, Phineas. How are you? 

Pope: I’m good. So what’s the latest information on budget cuts in Washington? How much money is the state looking to save? 

Gallup: Yeah, so lawmakers right now still have this goal of getting a budget passed before the end of the legislative session, and that’s April 27. No one knows if they’ll make that goal. But they are trying. There’s a number of bills that are moving through session this week. The state is facing an estimated $12 to 16 billion deficit over the next four years. So that’s the hole that they’re trying to fill. 

Pope: What have you heard from labor unions in the state?

Gallup: Labor unions that represent state workers have expressed concern on behalf of their members that with this budget deficit, that lawmakers are going to make cuts that would impact state services, the workers themselves, closing state facilities, possible furloughs too. So a lot of things that have been considered this session that would have a direct impact on some state employees’ jobs.

Pope: And just to clarify, furloughs are still possible for state workers at this time? 

Gallup: Yes. So lawmakers have said that furloughs are still on the table, but to be clear, they don’t know what those would look like, and they’re not exactly clear on where all the revenue proposals are going to come from, but it’s definitely still an option. The Washington Federation of State Employees, one of those labor unions I’ve spoken with, has said that one of the proposals that’s come from the Senate to furlough workers one day a month for two years would effectively negate the general wage increases that they had agreed upon in their 2025 to 2027 contracts. That’s just an example of what impact these furloughs would have. 

Pope: And we’ve heard a lot about a possible wealth tax. What would that do? Is some version of that likely to move forward before the end of the session?

Gallup: Some democrat lawmakers had proposed basically a wealth tax that would’ve generated $4 billion a year, a huge chunk of money. But Gov. Bob Ferguson has been really clear that he doesn’t support those proposals and he’s talked about how it’s untested, it could be held up in court. He right now, with uncertainty at the federal level with funding, really doesn’t wanna rely on a revenue stream that to him seems maybe unstable. So lawmakers have come back from that and they have an option now that generates less in revenue. Ferguson has said he’s open to having conversations about it. And this is a proposal that’s under Substitute Senate Bill 5797. Basically what it would do is establish a tax of 34 cents on every thousand dollars of value of these certain financial intangible assets. So those are like stocks, bonds. Certain things would be exempt from that, and the revenue would be really direct in that it would benefit the education legacy trust account. 

Note: This transcript has been edited for clarity.