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WA Democrats propose $1.5B spending increase despite multi-billion dollar deficit
Democratic lawmakers in Olympia unveiled supplemental budget proposals Monday that would increase state spending by $1.5 billion, despite a looming $2 billion deficit. The plans rely heavily on tapping Washington’s "Rainy Day" fund, with the House and Senate eyeing withdrawals of up to $880 million to cover rising costs and federal funding cuts. Republicans are criticizing the move, arguing it leaves the state with dangerously low reserves and relies on "one-time gimmicks."
OLYMPIA, Wash. - Democrats in the House and Senate unveiled their supplemental budget proposals, outlining adjustments to the two-year budget passed last year which covers 2025 – 2027.
Lawmakers are again attempting to close a multi-billion-dollar deficit. Both the House and Senate proposals would increase spending by about $1.5 billion. The state is still facing a more than $2 billion deficit for the current budget cycle.
The Washington State Capitol building in Olympia. (Albert James)
What they're saying:
Democratic leaders described the budget as "extremely challenging," citing rising costs, lackluster tax revenues and federal cuts.
"We're not only at a time when state resources are limited, our federal government cannot be relied on. We have a lot of uncertainty coming out of Washington D.C. and sometimes downright hostility towards the people in Washington," Senator June Robinson said.
Among the spending proposals, Senate Democrats are seeking to set aside $1 billion to cover rising lawsuit payouts, many of which are related to the child welfare system and Department of Children, Youth and Families (DCYF).
To address the current deficit, Democrats are also proposing a significant withdrawal from the state’s rainy-day fund. The Senate proposal would withdraw $750 million, while House Democrats are considering a withdrawal of $880 million.
"We are in a time of very slow economic growth, and our statute allows us to use funding from the rainy day fund, it contemplated exactly the situation we're in right now where there's less than 1% of job growth in the state," Robinson said.
WA governor proposes revenue from millionaire tax go to sales tax holidays
Governor Bob Ferguson says a portion of the revenue raised by the "millionaires tax" should fund two annual sales tax holidays.
The other side:
The plan to tap the rainy day fund has drawn criticism from Republicans.
House Republican budget leader Travis Couture said in a statement, "This budget leaves our state with one of the lowest reserve levels in the country and relies on risky, one-time gimmicks like sweeping dedicated accounts — which don’t fix deficits long-term; they just move them."
Republicans say the solution is to reign in spending with the state outspending the revenue they are bringing in. Senator Chirs Gildon called the current proposal record-breaking, saying it’s the first time the state budget has tipped close to $80 billion with an 11.3% increase over the previous budget cycle.
"If you think about our state government, since 2018 has basically doubled in size on the operating budget," Sen. Gildon said.
Gildon disagrees on the current proposal taking $375 million from state parks and another $395 million from the capital budget which funds construction projects, and shifting those dollars into the operating budget.
Republicans are also concerned about Democrats pulling from the state pension for firefighters and police. Gildon says there is no concern of pension money running out and that retirees should not worry about that aspect.
However, the current proposal, he says, wants to pull surplus dollars in the pension system and shift it to fund climate agendas and administrative costs to keep the programs going. Gildon says the shift will not create any noticeable benefits for Washingtonians.
Gildon also says the current proposal is doomed to fail because it is taking around half of the funds from the rainy day fund, which he says should be one-time dollars, not used for ongoing events for years to come.
"The theory is that they are budgeting on hope that either one, the economy is going to get better, or two, that the income tax will bail them out in future years, I don’t think you should budget on hope," Gildon said.
What's next:
The budget proposals are up for committee votes on Wednesday and could pass their chambers by the end of the week.
That would leave lawmakers around 12 days to negotiate a final budget before the session ends on March 12.
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The Source: Information in this story came from the Washington State Legislature and FOX 13 Seattle reporting.