OLYMPIA — The Legislature passed a $77.1 billion operating budget Sunday that protects essential services while significantly boosting support for K-12 education. 

The budget includes both targeted reductions and new revenue streams to responsibly address the state budget deficit. It makes $3.1 billion in cuts in the 2025-27 biennium, contributing to $7 billion in total reductions over the four-year budget outlook. New revenue totaling $8.7 billion will be added, with a net of $4.3 billion in 2025-27 and $4.4 billion in 2027-29. 

“This was a year that demanded hard, often painful choices,” Senate Ways & Means Chair June Robinson (D-Everett) said. “We knew the stakes were high — for families, for workers, for communities across our state. Every decision was made with care, focused on protecting essential services, supporting our schools, and investing where the need is greatest. We listened to Washingtonians and worked to deliver a budget that reflects the seriousness of this moment and the responsibility we owe to the people we serve.” 

“House Democrats started this process with a goal of protecting health, food, and shelter. This budget protects those crucial programs for Washington families, while also addressing significant needs in our public schools, particularly in special education. We were able to do all this by taking a balanced approach, avoiding calls for an all-cuts budget that would be devastating to Washington’s families, workers, and communities with the most need. I am grateful for the partnership with my Senate colleagues and for the support of the House Democratic Caucus,” House Appropriations Chair Timm Ormsby (D-Spokane) said. 

The budget makes large investments in K-12 education. Over four years, $750 million will go toward special education services and $213 million to materials, supplies and operating costs as well as $200 million for local effort assistance funding to support students in low-income school districts. 

The budget sustains funding for core services to ensure continued access to essential aid: 

  • $93 million for emergency food assistance organizations 
  • $117 million for local housing programs 
  • $20 million to expand resources for crime victims 
  • $25 million to improve support for refugee and immigrant communities 

The budget also funds and approves collective bargaining agreements for state employees, including for those who are not union-represented. It does not include any furloughs or health care premium changes for workers.  

The budget incorporates several revenue measures to support investments in education, health care, and essential services. These include a new excise tax on profits from banking and selling surplus zero-emission vehicle credits (HB 2077), school levy reform to gradually increase local levy capacity and adjust school funding formulas (HB 2049), and increases to business and occupation (B&O) tax rates, including a new surcharge on large businesses and an expanded surcharge on advanced computing services (HB 2081). It also closes obsolete tax exemptions (SB 5794), implements a more progressive structure for the capital gains tax and reforms the estate tax (SB 5813), and modernizes the sales tax to include additional services and products while establishing a one-time prepayment requirement for large retailers (SB 5814). 

New policy investments total about $500 million per year in the budget — a notable shift from the $2.4 billion added annually in 2023-25. It also lays the groundwork for preserving $2.3 billion in total reserves by the end of the 2025-27 biennium and $3.6 billion by the end of 2027-29. 

The operating budget now goes to the governor, and if signed into law, takes effect immediately. More details are available here.