The Washington State Legislature is set to reconvene on Monday for the 2026 legislative session, facing critical decisions regarding budget cuts, a proposed tax on income exceeding $1 million, transportation funding, and the state’s response to federal policies. This comes as the state grapples with a projected budget deficit reaching billions of dollars.
The disagreements among lawmakers were evident during a pre-session briefing held approximately 72 hours before the official session began. The briefing included discussions with transportation and budget committee chairs, legislative leaders from all four parties, and Governor Bob Ferguson.
State leaders acknowledged the significant budget shortfall, estimated to be in the billions. Ferguson’s supplemental budget proposal includes approximately $800 million in cuts, nearly $1 billion drawn from the state’s reserves, and a redirection of revenue from the Climate Commitment Act.
Republicans strongly opposed the proposal, accusing Democrats of continuing to overspend despite rising revenue. Representative Travis Couture stated, “We’ve never had more revenue in the state of Washington than we do right now, and it continues to grow. It’s slowed down, but we’re still growing. The governor’s budget still increases spending by over a billion dollars.” They characterized the budget approach as “unrealistic,” arguing it is not balanced within a four-year timeframe while continuing to expand state spending.
Ferguson also proposed a new tax: a 10% rate on annual income exceeding $1 million, projected to generate approximately $3.5 billion annually. The governor emphasized that a “significant portion” of this revenue would be returned to Washington residents through tax relief, including expanded Working Families Tax Credits for small businesses. “I’ve proposed the Working Families Tax Credit, which is a clear rebate to thousands of Washingtonians… small business owners, indeed, the backbone of our economy, need a specific credit,” Ferguson said. “I believe that most Washingtonians, and even those earning billions of dollars, will support that.”
Republicans uniformly opposed the proposal, expressing concerns that it could expand the scope of income taxation. Senator Chris Gildon warned, “We shouldn’t call this a tax on billionaires anymore, because we know how far it’s going to go. We should call it a first slice of the pizza, because it’s just a first slice – it’s going to expand to more people, eventually.”
Transportation committee chairs from both parties agreed that the state has underinvested in road and bridge maintenance. Approximately 10% of Washington’s bridges are over 80 years old, and the damage from the December storms has heightened the urgency, although federal disaster relief is expected to cover a significant portion of the costs.
Democrats emphasized the economic benefits of investing in infrastructure. “One of the quickest ways to create jobs is to increase investment in highway maintenance,” Senator Marko Liias said. “Economists tell us that every billion dollars spent on highway maintenance can create 10 to 20,000 jobs. So, Washington’s economy needs this.”
Republicans opposed issuing bonds to pay for routine maintenance. “My answer is simple, no… to leverage capital to pay for maintenance by issuing bonds, as someone said… all of what you do with maintenance will be used up and gone when we pay off the bonds,” Senator Curtis King said.
Democrats urged caution as costs continue to rise. “We’ve seen a rise in costs. Everything is costing a lot more. We’re entering a new phase,” Representative Jake Fey observed. “So, I think prudence needs to be considered.”
The Climate Commitment Act, which requires businesses to purchase quarterly emissions allowances to reduce emissions, remains a contentious issue. Republicans argue it has increased gasoline prices and acts as another tax, while Democrats say the program is essential to address climate and public health impacts. “I don’t think repairing infrastructure damaged by climate change is the best use of these funds when we can invest to prevent it,” Liias said. “We need to find ways to ensure that children in our elementary schools near airports or near ports aren’t breathing polluted air.”
Republicans said spending from the program should be more closely scrutinized. “You’ll hear me throughout the session – about the use of the Climate Commitment Act,” Representative Andrew Barkis said. “The people of Washington state will agree with us that we need to start using some of the existing resources before we continue to saddle Washingtonians with debt.”
The debate unfolded after the state acknowledged…
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