Published date: March 16, 2026

Week 10 Legislative Session Concludes (Sine Die)

The Legislature adjourned the 2026 session on March 12 at 8:25 p.m., passing all three supplemental budgets and numerous policy bills before the deadline. Much of the final day focused on negotiations over HB 6231, repealing a tax exemption for certain data centers. Passage was critical because the supplemental operating budget relied on the $63 million in projected revenue generated by the repeal, raising brief concerns about a possible special session. Once legislation is delivered, the governor has five days to act—or 20 days if delivered within five days of adjournment. Options include signing the bill, vetoing all or part of it, or taking no action, in which case the bill becomes law. Governor Bob Ferguson has indicated support for the Millionaires Tax and the transportation budget’s emphasis on maintenance and preservation, though vetoes to portions of the operating budget are likely. The 2027 legislative session will convene on January 11, 2027, in approximately 300 days.

Historic Debate on the Millionaires Tax

Earlier in the week, the House devoted nearly 24 hours of floor debate to the proposed “Millionaires Tax,”  SB 6346, considering more than 80 amendments. The bill establishes a 9.9% tax on Washington income over $1 million beginning in 2029. The Senate previously passed the measure 27–22, with three Democrats joining Republicans in opposition.

An adopted amendment would roll back several sales taxes beginning in 2029, potentially reducing distributions to cities, counties, and transit agencies by more than $300 million annually. To offset impacts, the operating budget creates a $200 million Local Government Fiscal Relief Account, though the distribution method remains unclear. The measure could still face legal challenges or a voter initiative before implementation.

Supplemental Operating Budget

Budget Specifics: https://fiscal.wa.gov/statebudgets/2026proposals/ho2026supp

Lawmakers adopted the final conference operating budget SB 5998, bringing the biennial operating budget to $79.4 billion, an increase of more than $2 billion. The budget relies heavily on one-time solutions, including $880 million from the rainy-day fund, transfers from other accounts such as the Public Works Assistance Account, and spending reductions to maintain balance through the biennium.

Major cost drivers include higher Medicaid expenses and more than $1 billion in legal claims, primarily tied to foster care sexual abuse cases. Program reductions include pre-K initiatives, school bus replacement funding, and rural school support.

Supplemental Capital Budget

Budget Specifics: https://fiscal.wa.gov/statebudgets/2026proposals/sc2026supp

The Legislature also approved the $889 million supplemental capital budget (SB 6003) focused on infrastructure and construction projects statewide. Investments include affordable housing, school construction, flood response, and clean energy projects.

The plan also redirects approximately $1 billion in cash resources traditionally used for capital programs—including public works and higher education building accounts—to support the operating budget while maintaining overall appropriation levels through adjustments in other accounts.

Supplemental Transportation Budget

Budget Specifics: https://fiscal.wa.gov/statebudgets/2026proposals/ht2026supp

Lawmakers approved a bipartisan $16.6 billion 2025–27 supplemental transportation budget (SB 6005) emphasizing preservation and maintenance of the state system. The package authorizes $1.5 billion in new bond authority to support maintenance and preservation through the 2029–31 biennium, including $800 million in Transportation General Obligation bonds and $500 million in SR 520 triple-pledge bonds.

The final agreement marked a shift from the House’s earlier position by incorporating bonding. The budget also includes $801 million in reappropriations for existing projects from prior transportation packages such as Connecting Washington and Move Ahead Washington.

Local governments raised concerns over a $180 million underrun assumption applied to local projects, though additional investments were made in programs administered by the County Road Administration Board, the Transportation Improvement Board, and the Freight Mobility Strategic Investment Board.

Public Transportation Programs

The final transportation budget restored previously reduced funding for the Regional Mobility Grant program and preserved Transportation Demand Management grants, which had faced a proposed $5.7 million reduction in the 2025–27 biennium.

Bills of Interest