SPECIAL STATE BUDGETS EDITION

Dear friends and neighbors,

With the legislative session well behind us, this is a good time to reflect on the investments we made this year in the Operating, Capital and Transportation Budgets. This was a grueling budget year. The Legislature had to make tough choices and next year is shaping up to be just as tough.

While we are dealing with budget shortfalls and uncertainty here in Washington state, the federal administration is making matters worse across the board. Tariffs are increasing the cost of living in our neighborhoods, basic goods are becoming more expensive as a result, and materials like those we need to build new housing have a higher cost. Decades of sound science is being undermined and overturned in climate and health care.

Congress also recently approved a package of cuts, requested by the president, that the nonpartisan Congressional Budget Office assures will mean almost 20 million Americans will lose their Medicaid coverage. We, as a state legislature, will need to grapple with the loss of federal funding and examine how best to support communities with the limited resources available.

We are also confronting a deeply disturbing escalation of immigration enforcement tactics across our state and the nation. The Members of Color Caucus, of which I am a member, addressed this issue in a joint statement a couple of months ago. I am thankful my colleagues and predecessors took early action by passing the Keep Washington Working Act in 2019, but we cannot stop working to keep our communities as safe as possible. You can read the statement, available in English and Spanish, here:

Members of Color Caucus Joint Statement

With the information we had on hand, we set out to best serve our communities. We made cuts where budget shortfalls dictated but also made strategic investments. Budget breakdowns and specific district take-homes below:

CAPITAL BUDGET: INVESTING IN INFRASTRUCTURE STRENGTHENS OUR COMMUNITIES

The state’s Capital Budget is responsible for funding the construction of infrastructure like housing, school buildings, behavioral health facilities, and other important projects, while also creating jobs.

This biennium’s Capital Budget made several key statewide investments, including:

$782 Million in housing and homelessness programs.
A record-setting $605 Million for the Housing Trust Fund – directly funding the construction of affordable housing.
$1 Billion for K-12 school construction and early learning facilities – including $202 Million for small district and tribal compact schools, $151 Million for school seismic safety, and $100 Million for early learning facilities.
$130 Million in grants for projects expanding behavioral health care capacity in community settings.

Locally, these are some of the projects in our communities that received funding:

Bridge Meadows Tacoma: $5 M

Bridge Meadows provides housing and services to foster children, a population that faces an extremely high risk of homelessness, unplanned parenthood, drug use, and involvement with the justice system. It provides essential services and permanent residency in inter-generational housing communities where they are surrounded by supportive resident elders and peers. Bridge Meadows Tacoma will serve 43 senior households and 17 foster families.

35th & Pacific Family Housing: $2 M

Construction of a building with 80 new units of housing on publicly owned land in East Tacoma. The housing provides a mix of one, two, and three-bedroom rental apartments affordable to households earning 30%, 50%, and 60% of Area Median Income. 25% of apartments are set aside for families for whom a member has an Intellectual or Developmental Disability.

Thrive Center Tacoma: $2 M

This key service helps provide transitioning housing to Refugees and Asylum Seekers as well as community support that leads to more successful outcomes, and it connects residents to critical resources and services that will help them move from surviving to thriving. The Tacoma center supports approximately 350 residents who were previously homeless. This funding will help Thrive with the purchase of the property, thus enabling it to maintain continuity of services for the long term.

Pierce County Healthcare Workforce Investment: $2 M

Addresses healthcare workforce shortages in Pierce County through renovations to Pacific Lutheran University’s Rieke Science Center. Renovations include: a state-of-the-art laboratory for health and pre-health education programs, and support vital programs in nursing, pre-med, and pre-pharmacy. This investment equips students—many of whom are expected to remain in the area after graduation—with the tools they need to tackle critical healthcare challenges and advance equitable care within the community.

South Tacoma Fire Station: $2 M

Relocation and construction of a new Fire Station #7 to provide better emergency response to the South Tacoma community.

Hillsdale Town: $1.7 M

Purchase and installation of new energy efficient windows and appliances, HVAC, attic insulation, roofing, and exterior painting. These efforts will include the renovation of 129 buildings consisting of 316 affordable housing units over two sites in Tacoma.

Pierce Center for Arts & Technology (Arivva): $1 M

Upgrading interior infrastructure (electrical, plumbing, mechanical systems) and reconfigure spaces for job training classrooms, community meeting areas, visual arts classrooms, and shared spaces such as a student lounge, kitchen, and restrooms.

Fishing Pier at Spanaway Lake: $773 K

Design, permitting and construction of a new fishing pier at Spanaway Lake Park. The existing pier was heavily damaged last year and was removed for safety reasons. The new pier will be used for fishing, motorized and non-motorized boating, jet skiing, paddleboarding, swimming and other recreational activities.

Portland Avenue Park Sprayground: $773 K

Completes construction of a sprayground and restroom at Portland Avenue Park, which is in one of Tacoma’s most diverse and economically challenged neighborhoods. This project will provide an entertaining place for families to gather, as well as relief from heat waves.

OPERATING BUDGET: A BALANCED APPROACH TO MINIMIZE HARM

Unlike the federal government, our State Constitution requires the Legislature to pass a balanced Operating Budget. And contrary to what some people believe, budget writers do start working on it very early in session. It is the most important task we must accomplish as lawmakers and one of the most difficult as well.

We started the year with a significant budget deficit caused by slowing revenue growth, increased demand for services, inflation, and unpredictability at the federal level. With that in mind, our budget team spent months combing through the budget to find efficiencies and places we could cut while still preserving people’s access to food, health, and shelter. Despite our efforts, we still needed to find new sources of revenue and I am including a section with that information further down.

The final $77.1 billion negotiated budget reflects our harm reduction approach by maintaining essential programs and services for working families and our most vulnerable residents. Here are some of the highlights:

CHILDREN, YOUTH & FAMILIES

Family Child Care Agreement: $376 Million
Early Childhood Education and Assistance Program (ECEAP) Rate Increase: $40 Million
Early Support for Infants and Toddlers (ESIT) Multiplier Increase: $36 Million
Juvenile Rehabilitation Administration (JRA) Capacity & Security: $51 Million

K-12 EDUCATION

Maintains funding for school meals and summer EBT for kids: $45 Million
Increases Special Education funding: $775 Million
Funds increased Local Effort Assistance: $200 Million
Increases funding for materials, supplies and operating costs: $215 Million

HIGHER EDUCATION & WORKFORCE DEVELOPMENT

Avoids tuition increases at our public two- and four-year colleges
Maximum Washington College Grant awards funded at 60% median family income: $45 Million
Continues the WSU Native Scholarship Program: $2.2 Million

HEALTH CARE

Continues funding for the Apple Health for Immigrants program
Protects funding for the Cascade Care Savings Program: $84 Million
Continues the Health Homes Program in 2026: $15 Million

BEHAVIORAL HEALTH & SUBSTANCE USE DISORDER

Funds Phase 4 of the Trueblood Settlement to continue supporting people through and out of the forensic mental health and criminal court systems: $65 Million
Increased funding for 988 & Crisis Facility Grants for three centers: $47 Million

LONG TERM CARE & DEVELOPMENTAL DISABILITIES

Consumer-Directed Employment, Agency Parity & Adult Family Home Agreement: $833 Million
Funds Nursing home rates and transitions clients to community settings: $55 Million
Maintains Assisted Living Bridge Rates & increases Community Residential Rates by 2%: $62 Million

HOMELESSNESS & HOUSING

Housing & Homelessness Increases: $145 Million
Youth Homelessness Diversion Funding: $6 Million
Tenant Right to Counsel Program: $3 Million

HUMAN SERVICES & POVERTY REDUCTION

Funds Food Security & Assistance: $128 Million
Immigrant, Refugee, and New Arrival Supports: $40 Million

PUBLIC SAFETY, LEGAL AID & CORRECTIONS

Community Reinvestment Program: $110 Million
Local Law Enforcement Grants: $100 Million
Reentry Center Conversions: $26 Million
Crime Victims Support: $27 Million
Public Defense Grants: $13.5 Million

CLIMATE, CLEAN ENERGY & NATURAL RESOURCES

Wildfire Response, Suppression, and Recovery: $22 Million
Invasive Species Prevention: $11 Million

——————————

A More Progressive Tax Code for Washington

Washingtonians deserve a fairer tax structure and in such a difficult budgetary environment, our state needs revenue sources that are stable and less reliant on regressive taxes, like the sales tax.

Re-imagining investments in public safety:

We need to re-envision how we invest in public safety. House Bill 2015 places the needs and well-being of our communities at the forefront while demanding greater accountability from law enforcement. It prioritizes the values of transparency, fairness, and community-centered policing shape the future of public safety.
Funding Washington’s paramount duty:

Our schools are struggling with budget constraints. House Bill 2049 increases the per-pupil limit for school enrichment levies, allowing local districts to vote on increases to support local school needs, including classroom and teacher supports, increased student services, and mental health and counseling programs.
Ensuring high-grossing businesses help fund community needs:

House Bill 2081 changes our Business & Occupation (B&O) tax in several ways, making it more progressive and ensuring some of the world’s largest corporations pay what they owe. It will help protect Washingtonians from harmful cuts to education, public safety, and the safety net, and invest in critical public services that keep people healthy and support our economic future.
Modifying Washington’s capital gains excise tax and estate tax:

Senate Bill 5813 modifies the capital gains tax, creating a tiered structure with an additional 2.9% surcharge on profits above $1 million from the sale of stocks, bonds, and other financial assets. For the estate tax, it excludes smaller estates up to $3 million in value – indexed to inflation moving forward – and creates a more progressive structure with higher rates on larger estates. The revenue is dedicated to K-12 schools, early learning, childcare, and higher education through the Education Legacy Trust Account.
Closing ineffective and obsolete tax exemptions:

Senate Bill 5794 repeals tax exemptions if the public policy objective wasn’t met, it is unclear if it was met, or if the exemption is legally obsolete. It also applies Business & Occupation tax to state-chartered credit unions if they merge with a bank regulated by the Department of Financial Institutions and applies B&O to revenue from the rental of storage units. By ending tax preferences that are not effective, Washington state will have more revenue for the essential services our communities need and keep Washingtonians healthy, housed, and fed.

TRANSPORTATION BUDGET: MAINTENANCE, PRESERVATION & SUSTAINABILITY TO KEEP US MOVING

The state’s Transportation Budget funds development of transportation infrastructure, which includes transit, roads and ferries, to ensure we can commute and travel safely, as well as move goods efficiently across Washington. Due to budget challenges, no new projects were funded in this budget, but it does continue to fund ongoing work on projects in our area, these are some of the highlights:

SR 167/SR 509 Puget Sound Gateway: $2.8 B

Constructs a new four lane alignment on SR 167 between I-5 in Tacoma and SR 161 in Puyallup; connects SR 509 south from SeaTac to I-5. $12 million of federal Carbon Reduction Program funds are provided for the Tacoma to Puyallup Trail.

I-5/Tacoma HOV Improvements: $1.3 B

This segment of I-5 experiences congestion and mobility problems due to high traffic volumes and is identified as part of the core HOV program. This project constructs HOV lanes from South 48th Street to the King County line.

I-5 S 38th St South to JBLM HOV Improvements: $260.5 M

Adds HOV lanes in both directions on I-5 from S 38th Street south to JBLM HOV lanes.

Pierce Transit – SR 7 Express Service Tacoma to Parkland/Spanaway: $15 M

Constructs and implements capital improvements on the SR7/Pacific Avenue corridor to improve transit travel time and service reliability.

Intercity Transit – Zero Emission H2 Demonstration Project: $10.3 M

Purchase up to three hydrogen-powered fuel cell electric buses to use on selected routes and acquire portable or temporary hydrogen fueling equipment.

I hope you found this information useful. To delve deeper into the budgets, please visit www.fiscal.wa.gov where you can look up specific investments by agency, and you can also take a look at the project maps. And if you have any questions, please don’t hesitate to contact my office.

Sincerely,