Published date: April 21, 2025
Only one week to go in the 2025 regular legislative session. Last week Wednesday, the opposite house cutoff came and went, so now the legislators are working to reconcile bills amended in the opposite chamber and work through those bills necessary to implement the budgets (NTIB).
Many of those NTIB bills included revenue bills that would generate about $12 billion over the next several biennia. The largest revenue generator is an expanded B&O tax, SB 5815 and it’s House companion, HB 2081. Both of those bills had hearings in their respective fiscal committees last week. Another of the revenue bills being considered is SB 5814/ HB 2083, which would extend the retail sales and use tax to certain services. This would also be a windfall to local governments that have sales tax authority. Also, in the mix are the bills that would raise the current property tax cap from 1% to 3%., HB 2049/SB 5812. That both chambers were running the same revenue bills, going in the same direction, gave some of us optimism that they might get the budgets done before April 27th, the last day of session. And then the Governor weighed in.
On Thursday, Governor Ferguson issued a press release stating his opposition to the proposed $12 billion in taxes:
“At a time of great economic uncertainty and assaults by the Trump Administration on core state services for working families, raising $12 billion in taxes is unsustainable, too risky and fails to adequately prepare Washington state for the crisis that looms ahead.”
Later that day, Governor Ferguson met with legislative leadership and reiterated that position, and, according to rumor, specifically called out the property tax cap bill, HB 2049/SB 5812. Hence, all the optimism about getting out of town on April 27th deflated like a sad lobbyist-shaped balloon. Whether the Legislature will carry on with their budget plan or whether they will pivot again is unknown. Yet, on Saturday, major pieces of that $12 billion tax package passed the Senate. Those measures are expected to receive floor votes Monday in the House.
The Transportation budget is still being negotiated, and it is unclear what approach they will take on culverts or gas tax. However, the bill, SB 5804, that would transfer public assistance account revenue to the general fund to create capacity to issue $5 billion in bonds is unlikely to pass. Local governments opposed that plan because it looked to repay the bonds with revenue from an existing tax on electrical utilities that usually goes toward grants and loans for local public works departments. It was another bill that the Governor was not enthused about.