OLYMPIA — Senate budget leaders unveiled a $78.5 billion operating budget plan Monday that puts the state on a path toward long-term fiscal stability while preserving essential services. 

The proposal includes both targeted reductions and new revenue streams to address the state budget deficit. Over the four-year budget outlook, $6.5 billion will be made in cuts and $16 billion added in revenue — a net of $6.2 billion in the 2025-27 biennium and $9.8 billion in the following one. 

New policy investments total about $800 million per year in the 2025-27 budget plan — a notable shift from the $2.4 billion added annually in the last biennium. The proposal lays the groundwork for preserving $7.6 billion in total reserves by the end of the 2027-29 biennium — about 17.5% of revenue — helping ensure continued stability and flexibility in future budgets. 

“Crafting this budget required tough choices, thoughtful conversations, and a strong commitment to the people of Washington,” said Sen. June Robinson (D-Everett), chair of the Senate Ways & Means Committee. “An all-cuts approach was never on the table — not when it meant turning our backs on schools, health care, and the basic services people depend on. This budget is a choice to lead responsibly — to face the reality in front of us and respond with solutions that are not just balanced and sustainable, but worthy of the people we serve.” 

The budget invests $750 million per year in K-12 education, most heavily in school operating costs and special education. K-12 also represents more than 80% of the net new investments across the broader five-year budget outlook, reinforcing the state’s ongoing commitment to improve public education.  

The budget sustains funding for core services such as health care, housing, and food assistance, ensuring vulnerable Washingtonians continue to get the help they need. It also includes a $25 million increase to expand support for crime victims and strengthen recovery resources.

The budget funds and approves collective bargaining agreements for state employees, including those who are not union-represented. It also provides ongoing cost-of-living adjustments for retirees in the Public Employees’ Retirement System Plan 1 (PERS 1) and the Teachers’ Retirement System Plan 1 (TRS 1), helping them keep up with rising costs. 

The proposal works in concert with the transportation and capital budgets. The operating and transportation budgets are designed to support one another — transportation investments in the 2025-27 biennium help reduce pressure on the operating budget, while beginning in 2027-29, operating dollars will start to assist with key transportation needs. Additionally, increased operating revenues strengthen the state’s general fund, which in turn supports the capital budget through greater bond capacity. 

“We built this plan with the bigger picture in mind,” said Sen. Derek Stanford (D-Bothell), vice chair of the Senate Ways & Means Committee for Operating. “It’s designed to align with other major investments statewide, so we’re meeting needs in a more connected and effective way.” 

The budget includes new revenue from a financial intangibles tax on individuals with more than $50 million in publicly traded assets (about 4,300 taxpayers) and 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). It also 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, and lowers the state sales tax rate from 6.5% to 6%. Funds would go toward K-12 education, health care, public safety, and social services. 

“People are going to see real, concrete benefits from the investments we’re proposing today — keeping schools open, providing special education services for students, food assistance for needy families, support for those with developmental disabilities and so much more,” said Sen. Noel Frame (D-Seattle), vice chair of the Senate Ways & Means Committee for Finance. “These investments into the lives and futures of Washingtonians are made possible in no small part because of the work we’re doing to fix our state’s antiquated and upside-down tax code. By making the wealthy few pay what they owe, we can fund the services Washingtonians count on.” 

The budget is scheduled for a public hearing 4 p.m. Tuesday in the Senate Ways & Means Committee and executive session 4 p.m. Thursday. The full proposal is available here. 

The Legislature must negotiate and pass a final budget by April 27, the end of the 105-day 2025 legislative session.