The state budget impacts the daily lives of Washingtonians

Most people probably don’t think about the state budget very much, but it impacts our daily lives.

From the price we pay to fill up our gas tank to roads and schools, housing affordability and homelessness, all have a connection to the state budget.

Washington’s budget has a multibillion-dollar gap.

Some officials are calling it a crisis.1

Is it? How did it happen? Learn more about how the state budget got to this point, what it means, and why it matters.

Keeping It Simple

This series of short videos breaks down the budget shortfall with a whiteboard, some cartoons, and the state’s own data.

State Spending and Revenues

Dollars in Billions

Washington is on track to collect $10 billion more in tax revenue over the next 4 years — still, spending is set to outpace that by $12 billion.

A GROWING DISCONNECT

Unlike in a fifth of other states,1 or at previous times in Washington’s history2, state tax revenues have not declined in our state. As Jay Inslee said in his last press conference as governor: “We’ve got a booming economy rather than a recession…one of the strongest economies in the country.” 3

In fact, in 2021-23, Washington collected $11.6 billion more than it did in 2019-21 in tax revenue.4 And the state is expected to collect another $10 billion more in tax revenue between now and 2027-29.5

As lawmakers meet for the 2025 Legislative Session to write a two-year budget, they are required to balance spending promises with expected tax revenue.

Unlike the federal government, the state can’t spend in deficit.

So how did we get to where cost to continue state programs exceeds what the state expects to bring in over the next 4 years by about $12 billion? 1

HOW WE GOT HERE

Lawmakers have increased spending by 40% over the last two budget cycles.

Since 2021, lawmakers have increased state spending in each of the two, two-year budgets by double digits each. 1

This has led to a 39.4% percent increase in spending over four years.2

Tax revenue increased at high rates as well in the biennia before 2023-25 3 — but were never expected to remain at such high levels for long.4

Which is Growing Faster: State Spending or the Cost of Living?
Washingtonians are struggling to keep up with the growth of their household costs, while the fastest growth rate of all has been the growth of state spending.

Recent state spending choices

AT-A-GLANCE

  • Gavel Icon

    2021

    The Legislature allocated about $16 billion in federal relief dollars. Without a budget shortfall,1 lawmakers emptied the Rainy Day Fund by nearly $2 billion.

  • Coin Icon

    2022

    With a $14 billion revenue surplus, the highest in state history, the Legislature directed 80% into new spending.3 This grew state spending  by more than 20% over the previous biennium.

  • Give Money Icon

    2023

    The Legislature passed the 2023-25 budget, which grew state spending by $8 billion.

  • Growth icon

    2024

    The Legislature added $2 billion in spending to the 2023-25 budget,6 taking overall spending growth in the biennium to 16% -- while tax revenues were projected to grow by 3.5%.

  • Dollar Icon

    2025

    With record-high tax revenues, including an expected $10 billion more over the next 4 years, the state is $10 billion to $12 billion short of tax revenue needed to pay for spending promises over the next 4 years.

The past decade: comparing average household income, state tax revenue, state spending

WA MEDIAN HOUSEHOLD INCOME 1

+55%

2013: $60,106
2023: $93,440

STATE TAX REVENUE 2-3

+99%

2013: $17.8 Billion
2023: $35.4 billion

STATE SPENDING 4

+114%

2013-15: $33.6 billion
2023-25: $72 billion

Fact-checking recent claims about the state budget gap:

“A perfect storm” of factors

In November, the state finance director described the budget gap as a “perfect storm” of factors outside of lawmakers’ control, coalescing at once. In fact, it is the result of legislative choices.

1

“Below average” revenue

In December, outgoing Governor Jay Inslee suggested the budget gap is the result of insufficient tax revenues, and a system “below average in the revenue that it generates.” In fact, Washington’s tax collections have performed historically well, and have supported an unprecedented expansion of state government over the past decade.

2

“Largest budget deficit” ever

3

State officials have said this is the largest budget gap in state history. In fact, the budget gap is dwarfed by the revenue shortfall of the Great Recession.

News

  • Herald Net

    Editorial: Don’t let state’s budget numbers intimidate you

    Read Article
  • Komo News

    WA Commerce Department 'not in compliance with state law' on grant funding, audit finds

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  • Washington voters blame budget shortfall on uncontrolled spending, oppose tax hikes

    Read Article
  • Fox 13 Seatle

    WA faces multi-billion dollar deficit after years of spending

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  • Washington State Standard Logo

    Making sense of Washington’s multi-billion dollar budget hole

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  • Center Square Washington Logo

    The driver behind Washington state’s budget shortfall

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  • KIRO 7 Logo

    The Washington budget mystery: How big is the state’s deficit really?

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  • KIRO 7 Logo

    Governor-elect Ferguson calls for $4 billion in state cuts to offset budget shortfall

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  • Axios Logo

    Budget battle to dominate new Washington legislative session

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  • Poll: WA voters want 2025 Legislature to focus on their pocketbooks

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  • Spokesman Review Logo

    Spin Control: Website offers education on one side of the state budget problem

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  • Komo News Logo

    Waste Watch: Did state lawmakers fumble budget surplus leading to funding gap?

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