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Governor Inslee’s budget proposal: Addressing a $10-12 billion shortfall

Governor Jay Inslee has released his final budget proposal, just weeks before the legislature convenes for the 2025 session and incoming Governor Bob Ferguson takes office. The proposal aims to address an estimated $10-12 billion budget shortfall over the next four years.

To balance the budget without harming low-income and working-class Washingtonians, Inslee has proposed a 1% tax on wealth exceeding $100 million, which would generate approximately $10 billion from around 3,400 of the state’s wealthiest individuals. Additionally, the proposal includes an increase in Business and Occupation (B&O) taxes for large corporations, which is expected to raise $2.6 billion over the next four years.

Thanks to these new revenue sources, the budget avoids major cuts to vital services, such as education, health, and human services. Overall, Inslee’s proposal maintains existing programs, delays the launch of new initiatives, and captures savings from unallocated funding. However, the budget includes very few new investments aimed at strengthening the state’s children, families and communities.

The Washington State Legislature will convene on January 13th, 2025, and Governor-elect Bob Ferguson will be sworn in on January 15th. Governor-elect Ferguson will present his own budget proposal shortly thereafter. The legislature will then review both proposals before finalizing their own budget, which is expected to be completed by the end of the session in April.

For more detail on the Governor’s proposed budget, please see this analysis which highlights where the budget lands on P4C priorities, as well as key budget actions in the areas of child welfare, early learning, juvenile rehabilitation, human services, housing and legal aid.

An analysis on behavioral health investments will be available soon.