Washington Legislature to confront major budget gaps in 2025  session

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Starting on Jan. 13, Washington state’s 105-day biennial legislative session will begin with lawmakers poised to address fiscal and policy issues amid leadership changes and a stronger Democratic majority. 

Among the key topics are a $14 billion operating budget deficit, an $8 billion shortfall in transportation funding, and initiatives to improve housing affordability and public defense. 

"The Legislature adopts a four-year balanced operating budget, a two-year capital budget and the transportation budget.” said Debora Munguia of Capitol Consulting during a Thurston County Board of County Commissioners (BoCC) work session on Dec. 4. 

Democrats gain majority, announce leadership changes 

The Democratic Party has strengthened its majority in both chambers, gaining one seat each in the House and Senate.  

“They picked up a House seat in the 26th Legislative District and a Senate seat in the 18th Legislative District,” Munguia said.

She noted that the 18th District’s results are undergoing a recount due to a close vote margin. 

Leadership changes include Jamie Pedersen as the new Senate Majority Leader and Jessica Bateman as chair of the Senate Housing Committee.  

The changes come alongside appointments from Governor-elect Bob Ferguson.

“Bob Ferguson has already announced some appointments that signal continuity and change within state government,” said Munguia, noting the executive branch’s alignment with the Legislature’s priorities. 

A slide presents key points for the 2025 legislative session including the Democratic majority and budget challenges.
A slide presents key points for the 2025 legislative session including the Democratic majority and budget challenges.
JOLT STAFF PHOTO VIA ZOOM

Operating budget faces a $14 billion deficit 

In terms of the operating budget, Washington projected a $14 billion deficit over the next four years, up from previous estimates of $10-$12 billion. 

Munguia underscored the gravity of the situation.

“The legislature is required to pass a balanced budget, and they’re facing significant shortfalls," Munguia said.

Governor Jay Inslee has implemented a spending freeze on cabinet agencies and directed state departments to propose budget cuts.

“They’re scrubbing the budget,” said Munguia, who was referring to efforts to identify savings and reduce expenditures. 

Lawmakers are also considering new revenue streams, such as lifting the 1% property tax cap and introducing a graduated real estate excise tax. 

“There’s also discussion about implementing a county utility tax as a revenue source,” Munguia added. 

Munguia noted that these proposals are expected to spark debate, as lawmakers weigh the need for revenue against the burden on taxpayers. 

Transportation budget faces $8 billion shortfall 

With gas tax revenues declining, the state’s transportation budget is expected to face an $8 billion shortfall over the next decade. 

“Gas tax revenues are declining because vehicles are becoming more fuel-efficient and people are buying less gas,” Munguia explained. 

She also shared that lawmakers have identified four priorities for the transportation budget: 

  1. Completing projects from the Connecting Washington and Move Ahead Washington packages.
  2. Addressing the growing maintenance backlog. 
  3. Making strategic investments. 
  4. Improving traffic safety. 

To address the funding gap, proposals include shifting sales tax revenues from motor vehicles to transportation, increasing permit fees and introducing toll charges. 

“Representative Jake Fey is planning to introduce a bill on starting a road usage charge program,” Munguia said.

She explained that the charge, which would replace the gas tax with a mileage-based system, is being approached cautiously. 

“They’re looking at it as more of a dial than a switch because it would be such a big change for Washington citizens.” Munguia added. 

BoCC Chair Tye Menser calls for increased funding for public defense, noting its significance for Thurston County.
BoCC Chair Tye Menser calls for increased funding for public defense, noting its significance for Thurston County.
JOLT STAFF PHOTO VIA ZOOM

Housing affordability and legislative focus 

Housing affordability remains a key priority, with Jessica Bateman leading reforms as chair of the Senate Housing Committee. 

“Senator Bateman has been a very strong proponent of middle housing legislation,” Munguia said.

“She’s focused on increasing the supply of duplexes, triplexes and cottage housing to make housing more attainable.” 

A shortage in mid-level housing has created bottlenecks in the housing market, according to commissioners Tye Menser and Wayne Fournier. 

Fournier emphasized, "The greatest need isn’t in the lowest income levels of houses. The real bottleneck is in mid-level housing," stressing how this shortage affects all income levels. 

The BoCC expressed interest in exploring these issues further to address housing challenges.  

Munguia noted that lawmakers are expected to introduce measures aimed at streamlining the permitting processes and reducing regulatory barriers with the goal of increasing the supply of affordable housing. 

Additional proposals include rent stabilization measures to protect tenants from rising rents. 

The housing crisis also intersects with other legislative priorities, including transportation and behavioral health. 

Public defense reform and bipartisan support 

Meanwhile, Washington ranks 49th nationally in public defense funding, prompting calls for reform. 

“If the public defense bill passes, it could mean $4 million back to Thurston County,” Menser said. “That would insulate us from new caseload standards while providing better services.” 

Munguia highlighted the strong bipartisan support for addressing public defense funding disparities. 

“Once people understand and see the impacts in terms of how low Washington state is in providing those services, it’s obvious that it’s necessary and needed,” she said. 

Moving forward: key dates and actions 

  • Dec. 2: Pre-filed bills become available, as legislators begin preparing for the upcoming session. 
  • Mid-December: Governor Jay Inslee is expected to announce budget cuts, as part of efforts to address the state's projected fiscal shortfall. 
  • Dec. 12: Thurston County Legislative Breakfast to discuss key legislative priorities with local lawmakers. 
  • Jan. 13, 2025: The 105-day biennial legislative session in Washington state officially begins. Meetings with legislators throughout the session, with weekly updates and daily communications as needed. 
  • The Thurston County Board of County Commissioners holds a work session, focusing on addressing budget deficits and legislative priorities for 2025.
    The Thurston County Board of County Commissioners holds a work session, focusing on addressing budget deficits and legislative priorities for 2025.
    JOLT STAFF PHOTO VIA ZOOM

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  • RedskinPatriot

    Utility tax? Increase property taxes? Oh, and the comment regarding "... cars are more fuel efficient" (to paraphrase), really? I guess when the plans fail, planners plan.

    Not one mention of budget cuts until you get to Jay Inslee's comment - really? Now that you are out the door you want to mention budget cuts knowing that you are exiting stage left.

    We have a state that spends millions maybe even billions on illegal aliens, but they turn around and ask taxpayers to fund this ridiculous idea of a sanctuary state. They spend so much money and haven't accounted for all the people who have fled this state in the last 5 years...

    Lower taxes, reduce spending, and limit government intervention and I guarantee you will see economic growth, period! End of Story - no matter your argument, I am right.

    Wednesday, December 11, 2024 Report this