Inslee proposes 2025 budget

OLYMPIA — Outgoing Washington Governor Jay Inslee delivered his budget proposal for 2025 during a press conference Tuesday, revealing a plan that aims to tackle a projected $16 billion budget shortfall over the next four years.  

"We have been successful as a state because we've always hewed to the basic values of the state of Washington,” Inslee said. “Those values are that we invest in our people, we don't leave people behind, and importantly; we don't go backwards."  

Inslee leaves office Jan. 15, when Governor-elect Bob Ferguson is sworn in. Inslee did not run for a fourth term.  

According to the Associated Press, Ferguson's staff have said Ferguson is reviewing the budget and may release a statement on it after the review has been completed. 

Proposed Cuts  

Inslee highlighted the circumstances surrounding his budget proposal, noting the experience of past budget shortfalls, which reached as high as $9 billion. 

The governor said many difficult decisions had to be made in the crafting of the draft budget, particularly concerning essential services, which were at risk of severe cuts during previous fiscal crises. 

“Today, we are proposing a balanced budget,” Inslee said. 

The proposed budget includes approximately $2 billion in reductions or delays over the next four years, with specific cuts impacting various state programs.  

Inslee mentioned plans to close the Mission Creek Corrections Center for Women, three re-entry centers operated by the Department of Corrections and two Regional Health Care facilities. Additionally, the proposed budget puts a pause on the expansion of childcare eligibility and delays bonuses for certified educators. 

Proposed Tax  

A major component of the proposed budget is the introduction of new taxes aimed at generating revenue, particularly from Washington's wealthiest residents. Inslee outlined plans for a new wealth tax that would impose a one percent tax on assets exceeding $100 million.  

“This tax would only be on the excess over $100 million,” Inslee said. 

He said this would only impact a small number of individuals while aiming to address what he called growing wealth inequality in the state. Inslee said this measure would not hinder the wealth accumulation of those taxed, as “any multi-millionaire not getting 5% on the return but then only paying a 1% tax, you're still going to have a lot of wealth growing in your portfolio.” 

He acknowledged the budget's intention to focus on public safety, education, housing and behavioral health, reiterating a commitment to not regress on the progress he feels has been made in these areas. 

“Voters have a perception that it needs to become fair,” Inslee said.  

Legislative Response 

State legislators from both sides of the aisle responded quickly to Inslee’s announcement with Democrats mostly favoring the proposal and Republicans questioning the sincerity of the effort behind it. 

Senate Ways and Means Chair Sen. June Robinson (D-Everett) expressed her appreciation for Inslee’s approach.  

“I appreciate Gov. Inslee’s thoughtful and future-focused budget proposal, which highlights both the progress we’ve made as a state and the challenges that lie ahead,” Robinson said.  

She emphasized the importance of recognizing growing inflation, increasing caseloads for safety net programs and investing in housing, education, behavioral health and general public safety. 

Conversely, Rep. Travis Couture (R-Allyn), the ranking Republican on the House Appropriations Committee, criticized Inslee’s budget, saying he didn’t feel the proposal was serious. 

“Governor Inslee's $13 billion tax hike and reckless spending increase show just how out of touch his administration is with the financial realities facing Washington families,” Couture said.  

Washington spends too much and should examine cuts rather than additional revenues, Couture said. He pointed to record revenues in recent years that have not adequately addressed the state’s budgeting issues. 

Couture labeled Inslee's proposal as fiscal irresponsibility. 

“Raising taxes when families are struggling with the high cost of living, small businesses are closing their doors, and inflation is squeezing every dollar is the wrong approach,” Couture said. 

He warned that the governor's reliance on the proposed wealth tax, which Couture feels may be legally questionable, could jeopardize the state’s financial standing. 

“This is no more than an unrealized capital gains wealth tax that is more volatile than the state's current capital gains tax, which is already generating less revenue than expected,” Couture said in a release. 

Meanwhile, Sen. Yasmin Trudeau (D-Tacoma), vice chair of the Senate Ways and Means Committee for the capital budget, praised the governor's commitment to infrastructure investment.  

“I would like to thank the governor and his team for all their work. This budget proposal will be an important foundation to our capital budget-writing work this session,” Trudeau said.  

She emphasized the need for major investments in affordable housing and infrastructure projects. 

Senator Judy Warnick (R-Moses Lake) says she thinks this budget season is going to be particularly difficult, in an interview with the Columbia Basin Herald. 

“I think it's going to be very challenging to find the priorities that we can all agree on to support, because, like I said, we have the revenue coming in, it's just bigger spending,” Warnick said. 

The budget will be a priority on both sides of the political aisle, Warnick said, with a great deal to be worked out to reach an agreement during the state legislative session which begins in January. 

“It'll be the focus on the entire session, how we're going to reach an agreement on the budget.”  

She said she has concerns regarding the budgeting for K-12 education, which she said is a top priority for her this legislative session.  

“Well, the initial glance of this one, like I said, I'm very concerned about the education funding and whether it's affordable,” Warnick said. “Can the average taxpayer, the average job holder in the state of Washington, the average small business, is it affordable to those of us out here in the state of Washington?” 

As the legislative session progresses, lawmakers will engage in extensive debates to shape the final budget. 

“This is a starting point for legislators and others to have this discussion, and I look forward to it,” Inslee said.