Washington State Legislative Update – Week of  January 13-17, 2025

The 2025-26 biennium has officially commenced and Democrats will boldly march into 2025 retaining firm control of the Governor’s Mansion, both chambers of the legislature, and all statewide offices. In fact, no statewide offices changed party hands in the 2024 General Election, but several newly elected statewide officials have replaced other long-serving officials who retired or sought other positions this year. For the first time in twelve years, Washington has a new governor, former twelve-year Attorney General Bob Ferguson (D) replacing Jay Inslee (D). New Attorney General Nick Brown (D) will take the reins at the ATG, and former Senator Patty Kuderer (D) will replace Insurance Commissioner Mike Kreidler (D) who served for twenty-four years. The Department of Natural Resources has a new environmental champion at the helm in former Representative and King County Councilmember Dave Upthegrove (D).

Download a PDF document showing new members: 2025 Legislature – New Members

Executive Orders

Shortly after being sworn in as Washington’s 24th governor, Governor Bob Ferguson signed three executive orders to address the following:

Housing – This directs state agencies to review all regulations that impact housing, permitting and construction and identify any provision that can be streamlined, deferred or eliminated.

Reproductive Freedom – This directs the Department of Health to convene a roundtable of medical providers, reproductive health experts and policy makers to recommend strategies for protecting reproductive freedom.

Permitting Reform – This directs all state agencies to cut down their permit and license processing times. If an agency does not meet its deadline, it will refund the application fee.

In his inaugural address, Governor Ferguson spoke of several topics that are important to his administration. They are more housing, more police officers, protecting reproductive health care, and free breakfast and lunch to all public school students. He also spoke of the importance of bipartisanship, urging everyone to listen to each other and allow the strongest argument to prevail.

Legislative Composition

Republicans in Washington State lost ground to Democrats in the 2024 General Election. In the House, Democrats now hold 59 seats to the Republicans’ 39 seats. In the Senate, Democrats now hold 30 seats and Republicans hold 19. In the 26th legislative district, Addison Richards (D) won the open seat that had belonged to Representative Spencer Hutchins (R-26) and in the 18th, Adrian Cortes (D) won the open seat that had belonged to Senator Ann Rivers (R-18). The newly elected Republican members replacing retiring legislators like JT Wilcox (R-2) and Eric Robertson (R-31) now lean hard to the right, despite caucus efforts to prevent that from occurring.

Due to redistricting, House members moving to the Senate, results of the 2024 elections, and new appointments, there are more than thirty changed seats in the legislature and a lot of new faces. Additionally, chairships received quite a shake-up as a result of the 2024 retirements. In the House, Rep. Kristine Reeves (D-30) will chair Agriculture & Natural Resources, Rep. Steve Bergquist (D-11) will chair Early Learning & Human Services, Rep. Dan Bronoske (D-28) will chair Health Care & Wellness, Rep. Dave Paul (D-10) will chair Postsecondary Education & Workforce, and Rep. Sharlett Mena (D-29) will chair State Government & Tribal Relations. In the Senate, Sen. Mike Chapman (D-24) will chair Agriculture & Natural Resources, Sen. Claudia Kauffman (D-47) will chair Business & Financial Services, Sen. Jessica Bateman (D-22) will chair Housing, Sen. Sharon Shewmake (D-42) will lead Environment, Energy & Technology, Sen. Rebecca Saldaña (D-37) will chair Labor & Commerce, Sen. Derek Stanford (D-1) will vice-chair the operating portion of the budget, and Sen. Jesse Salomon (D-32) will chair Local Government. The Senate Democrats have also elected a new leader, Sen. Jamie Pedersen (D-43) to replace retiring Senator Andy Billig (D-3).

Budget Priorities

In Washington State, the first year of the biennium is the longer session (105 days) to give legislators time to write and approve a budget. But this year, Washington faces its most significant budgetary challenge in over a decade, with a projected $12-$14 billion shortfall through June 2029. The potential budget gap is likely much larger because the estimate does not include the amount needed to pay the two-year collective bargaining agreements negotiated with state employee unions. This shortfall is the result of rising costs, increasing demand for public services, and lower-than-expected tax collections. For context, this deficit is smaller than the Great Recession’s $16 billion gap (equivalent to $23 billion today), but the challenge remains substantial and both cuts and taxes are on the table. Had voters approved initiatives to eliminate the capital gains tax, the public long-term care insurance program, and the cap-and-trade program in November, the deficit conversation would have been even more dramatic.

The 2025 legislative session will test Washington’s Democrat leaders as they navigate this fiscal challenge while pursuing progressive majority goals. To counter the shortfall, minority Republicans suggest programmatic cuts, but a massive revenue effort is underway by the majority Democrats contemplating many possibilities, including:

  • Boosting the state’s capital gains tax. The 7% tax, enacted in 2021, applies mainly to profits from the sales of stocks and bonds above $270,000. That could be raised to 9.9% for profits exceeding $1 million.
  • The business taxes considered by Senate Democrats include a payroll tax similar to Seattle’s “JumpStart” tax on big businesses. The proposal would impose a 6.2% tax on compensation above $168,600 — similar to what companies already pay for Social Security and family medical leave taxes on wages below that threshold. It would apply only to companies with Washington payrolls of more than $8 million. That could bring in roughly $3.7 billion per year from about 4,000 businesses. An alternate plan would scrap the $8 million payroll limit, applying the tax to all companies paying high wages.
  • A 1% business and occupation tax surcharge on companies with taxable income of more than $500 million, similar to a tax previously imposed on big banks.
  • Removal of a cap which limits the amount big companies such as Amazon and Microsoft pay to fund affordable college tuition to $9 million a year. Democrats are eyeing removing the cap or raising it to $15 million.
  • Allowing the state and local governments to raise total property tax collections by 3% annually, instead of the current 1% limit.
  • Imposing a new tax of 1% on the home sales of more than $3,025,000, with the money going to housing programs.
  • Making rental storage units a taxable retail sale, requiring them to pay taxes they are currently exempted from.
  • Applying an 11% tax on guns, ammunition and gun parts, in addition to other state, federal and local taxes. The tax would not apply to sales to law enforcement or the military.

Much of the committee work this week focused on introductions and work sessions. For noteworthy legislation next week, we will see HB 1217 (Alvarado, D-34) Improving housing stability for tenants subject to the residential landlord-tenant act, HB 1150 (Berry, D-36) Improving Washington’s solid waste management outcomes, and HB 1168 (Shavers, D-10) Increasing transparency in artificial intelligence.

Important Dates:

  • Monday, January 13 – First Day of Session
  • Friday, February 21 – Policy Committee Cutoff, House of Origin
  • Friday, February 28 – Fiscal Committee Cutoff, House of Origin
  • Wednesday, March 12 – House of Origin Floor Cutoff
  • Wednesday, April 2 – Policy Committee Cutoff, Opposite House
  • Tuesday, April 8 – Fiscal Committee Cutoff, Opposite House
  • Wednesday, April 16 – Opposite House Floor Cutoff
  • Sunday, April 27 – Sine Die

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Brynn Brady

Ceiba Consulting, Inc. | ceibaconsulting.com

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