Budget needs hard choices, not rainy day fund

Published 1:30 am Tuesday, March 3, 2026

Washington lawmakers received a bit of a reprieve last week. But as they negotiate the supplemental operating budget for the current biennium, they must focus on tax relief for citizens and spending cuts, not raiding state reserves and increasing spending.

Democrats, who have strong majorities in the House and Senate as well as control of the governor’s office, released their budget proposals on Sunday. Now the hard work begins to reconcile those plans and devise a budget that is acceptable to Gov. Bob Ferguson.

The state revenue forecast released last week provides some good news. Projected tax revenue is expected to bring in $75.3 billion during the current two-year budget cycle — an increase of $827 million compared with the November forecast.

“We are still in a challenging period as costs to maintain current state service levels are increasing, as are caseloads for essential programs families rely on,” K.D. Chapman-See, director of the Office of Financial Management, said.

Following that projection, Democratic leaders in both chambers released their proposals for adjusting the two-year, $77.8 billion state budget that was passed in 2025. The Senate plan calls for $79.3 billion in spending; the House proposal would cost $79.2 billion. To help pay for the increase, each proposal taps into the state’s rainy day fund.

Indeed, a projected budget shortfall qualifies as a rainy day; there is a reason the funds officially are known as the Budget Stabilization Account. But lawmakers must be cautious about withdrawing from the account.

As state Treasurer Mike Pellicciotti said in January regarding the budget shortfall: “My concern is that there are two tools available to the Legislature to address that. Either more taxes, or more cuts, those are the two options; that they don’t take door No. 3 — which is raid reserves, raid pensions in a way that is not sustainable for the long-term health of the state.”

The Senate budget would transfer $750 million from the account, which currently is projected to have approximately $2 billion at the end of the 2025-27 biennium; the House would withdraw $880 million. The risk of reducing the fund for a rainy day is that the state could would be unprepared for a downpour, such as a pandemic that shuts down economic activity.

Rep. Travis Couture, R-Allyn, ranking member of the House Appropriations Committee, criticized the proposals: “They drained the rainy day fund, launched an unconstitutional income tax, and raided a pension system — all to avoid making hard decisions.”

The Legislature is considering a “millionaires tax” that would not take effect until after this budget cycle. And the House has approved the transfer of money from a state pension plan for first responders, which they say is overfunded.

Democrats will have a difficult time convincing taxpayers that their approach is fiscally responsible. Since 2015, after adjusting for population growth and inflation, state spending has increased 30 percent; surely some targeted cuts can be found in a $77.8 billion budget — even if programs provide value for many residents.

Sen. June Robinson, D-Everett, chair of the Senate Ways and Means Committee, said, “You add rising caseloads for things that we have promised Washingtonians like Washington College Grant, Working Connections Child Care, Medicaid — all of those are seeing increased costs.”

That can make it difficult to balance the budget. But leadership requires making hard decisions for the long-term health of the state; Democrats are falling short with their budget proposals.