Washington State Legislative Update 

Week of March 24-28, 2025

With just one month left of the 2025 regular legislative session, the deadline for bills to be voted out of policy committees is Wednesday, April 2. After this date, there is a very tight six-day turnaround for bills that have an impact on the state budget to be voted out of fiscal committees. This brief window of time means that lawmakers will have to act quickly to ensure that bills with fiscal implications, but are not “NTIB”, receive the necessary attention before they can move forward in the legislative process.

Speaker Emeritus Frank Chopp Passes Away

The legislative community was shocked this week by the news that former Representative, Speaker Emeritus Frank Chopp (D-43) died on Saturday at the age of 71. Chopp was elected to the Legislature in 1994, a year when his Democratic Party suffered significant losses, dropping from a near supermajority in the House to a 62-36 minority.

In 1997, he became House Minority Leader and when the House was evenly split between Democrats and Republicans in 1999, he served as co-speaker alongside Republican Clyde Ballard of East Wenatchee.

Democrats regained control of the chamber after winning a special election in Snohomish County in 2001, and Chopp was appointed speaker in 2002. He held the position until stepping down in 2019, stating that he wanted to “focus more energy on the issues that matter most and are priorities for the caucus.”

Chopp is generally regarded by members of both parties as a giant in Washington politics and is credited with leading the effort to create the Housing Trust Fund, Apple Health and Homes Program, and Apple Health for Kids.

Democrat Operating Budgets Released

Washington’s House and Senate Democrats released their operating budgets on Monday. Both budgets hinge on significant new tax revenues over the next four years—$17 billion in the Senate plan and $15 billion in the House plan.

In the Senate, Democrats propose balancing the next two-year budget by delaying expansions to early learning and child care programs, implementing furloughs for state workers, and depleting state reserves to boost funding for public schools, particularly special education.

House Democrats, meanwhile, avoid furloughs and tapping into savings. Like the Senate, they delay the expansion of early learning and child care programs but allocate approximately $1 billion less in new funding for special education and public school operations.

SB 5167 – Senate Democrat Proposal:

  • $78.5 billion total budget
  • $1.6 billion in new spending, primarily for education and state worker contracts
  • Cuts of $3 billion over the next biennium and $6.5 billion over four years
  • Contains new revenue from financial intangibles tax on individuals with more than $50 million in publicly traded assets (about 4,300 taxpayers)
  • Contains new revenue from a 5% payroll tax on compensation above the Social Security threshold for employers with $7 million or more in annual payroll (about 5,289 businesses)
  • Features a property tax reform that allows collections to grow with population and inflation
  • Repeals 20 tax exemptions identified as ineffective or obsolete by nonpartisan auditors
  • Lowers the state sales tax rate from 6.5% to 6%
  • A withdrawal of $1.6 billion from the state’s emergency reserves, leaving just $95 million by mid-2026
  • Includes a temporary 5% pay cut for state employees, equating to about 13 unpaid furlough days. It also proposes increasing the employee share of health benefits to 20% starting in the 2027–29 budget

HB 1198 – House Democrat Proposal:

  • $77.8 billion total budget
  • $920 million in new policy spending
  • Ends the first fiscal year with $1.7 billion in reserves, growing to $3.2 billion by 2027
  • Contains new revenue from legislation to modify the state and local property tax authority
  • Includes financial intangible assets tax that imposes a tax of $8 on every $1000 of assessed value on certain financial intangible assets, such as stocks, bonds, mutual funds, and index funds, with the first $50 million in assessed value exempt from the tax
  • Contains a one percent Business & Occupation (B&O) tax surcharge on businesses with taxable income over $250 million
  • Increase to the surcharge on specified financial institutions with annual net income of $1 billion or more from 1.2% to 1.9%

Transportation Budgets Released

Washington State lawmakers have introduced competing transportation budget proposals, each aiming to address the state’s infrastructure needs through different funding mechanisms. Both proposals aim to address a projected $1 billion shortfall over the next two years, with the Senate’s plan highlighting the necessity of the gas tax increase to prevent project delays and workforce reductions in sectors like ferries and State Patrol. These differences underscore the Legislature’s ongoing debate over the most effective and equitable methods to fund Washington’s transportation infrastructure in the time of higher efficiency vehicles.

SB 5161 – Senate Bipartisan Proposal:

  • Allocates $6.2 billion for operating costs and $10 billion for capital projects
  • Suggests a 6-cent per gallon increase, raising the state gas tax to 55.4 cents (excluding the federal rate). This increase is projected to generate $1.5 billion over six years
  • Includes a proposal to transfer 0.3% of sales tax collections from the operating budget to transportation, adding $800 million annually starting in the 2027-2029 biennium

HB 1227 – House Democrat Proposal:

  • Allocates $6.1 billion for operating expenses and $8.9 billion for capital costs
  • Proposes a larger 9-cent per gallon increase, expected to yield $1.8 billion over six years
  • Does not incorporate the sales tax transfer strategy found in the Senate proposal

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.

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