(The Center Square) – Washington state faces deficit spending by 2028 as lawmakers just hit taxpayers with the state’s largest combined tax increase – all driven by massive state spending increases over the past decade, an investigation of state budgets by The Center Square found.
Washington state spent about $80 billion in the 2013-15 budget but is set to spend more than $173 billion in 2025-27, a more than 116% increase over that time. U.S. inflation since 2015 has risen just 35.63%.
The surge in spending of taxpayer dollars prompted some policy analysts and lawmakers to say the increases must end sooner or later.
Washington State Economic and Revenue Forecast Council member and ranking minority member for House Appropriations Rep. Travis Couture, R-Allyn, told The Center Square that the only winners in Olympia are “politicians, bureaucrats and criminals.”
“At the end of the day you have to ask yourself, ‘What did we get for that new spending?” he asked. “At the end of the day, we don’t see the results on what we’re spending on.”
In just five specific budget areas, state spending increased by $77.2 billion since the 2013-15 biennium, although that spending includes more than just state revenues and in one area a shift occurred from local funding to state funding.
“I think that a combination of the fact that you already have a shortfall with a $9 billion tax increase, things have to change moving forward,” Mountain States Policy Center Vice President and Director of Research Jason Mercier told The Center Square. “I don’t know if they can do much more. They’ve played all the games; they’ve done all the fund shifts. You just did a tax increase. It’s not going to get better; it’s going to get worse on the forecast. The question now with budget is at some point you have to do the responsible thing and cut some spending.”
According to an analysis of data from fiscal.wa.gov, the $77 billion increase over the past decade in just those five areas occurred within the following departments of the combined capital and operating budget:
- An increase in Washington State Department of Social and Health Services spending from $9 billion to $25.4 billion, a $15.6 billion or 182.22% increase
- An increase in Long Term Care spending from $3.8 billion to $12.9 billion, a $9.1 billion or 239.47% increase
- An increase in General Apportionment spending from $11.4 billion to $22.6 billion, a $11.2 billion or 98.25% increase
- An increase in Public Schools spending from $17.7 billion to $37.4 billion, a $19.7 billion or 111.3% increase
- An increase in Washington State Health Care Authority from $16.4 billion to $38 billion, a $21.6 billion or 131.71% increase
That spending far outpaces inflation and population growth.
According to the U.S. Bureau for Labor Statistics inflation calculator, there has been a cumulative price increase of 35.63% since July 2015. According to the state Office of Financial Management, the state population has grown from 7,061,410 to 8,035,700 in the same time period as of 2024, a 13.8% increase.
Mercier noted that compared to other states in the region, such as Idaho and Montana, Washington state spending is out of control.
“Washington is such an outlier on the spending increase,” he said. “Other states are tracking very closely to inflation. Idaho was below inflation this past year.”
The state’s fiscal situation also comes amid record high revenues supported by the largest tax increase in state history. Rep. Ed Orcutt, R-Kalama, the ranking minority member of the House Finance Committee and a member of the state Economic and Revenue Forecast Council, wrote in an email to The Center Square that under the current forecast, the state ends with a $2 million balance at the end of 2027, but faces a $444 million fiscal deficit in 2028.
“We will have time to go in during the 2026 session that starts in January to make adjustments to the budget to make it balance across the 4-year outlook window … to prevent it from going negative,” he wrote. “If done early enough in session, amendments to the budget could allow for 2/3 of the 2025-27 budget cycle to absorb the changes – much better than trying to fix budget problems in the second year of the biennium when there is just a few months to absorb the changes needed to cover shortages between revenues and spending.”
However, he added that “we have time to make SPENDING adjustments to bring the outlook into balance – not to dip into emergency reserves. Budgets need to be written to expected revenues rather than to increase taxes to fund the budget written.”
Regarding the state spending increases, Orcutt said the growth has been funded by tax increases that he opposed.
“I have questioned the sustainability of most budgets passed since 2002, so I do indeed have concerns about the sustainability of spending since 2013,” he wrote. “I have and will continue to oppose tax increases and will continue to advocate for budgets to be written based on expected revenues – not budgets written, then taxes increased to fund that budget.”
During the 2025 legislative session, the Legislature enacted or increased taxes and fees estimated to generate more than $9 billion over the next four years, and include the following:
- Increased the business and occupation tax rate for most businesses from 1.2% to 1.5%, which is expected to generate $2 billion during the 2025-27 biennium
- Expanded the retail sales tax base to include additional services, expected to generate $2.9 billion over the 2025-27 biennium and $4.7 billion over four years, making it the largest single revenue source among new taxes and fees
- A 50% increase in over 40 liquor-related fees
- Retroactively created a progressive rate structure for the existing 7% tax on income from the sale of capital gains above $270,000, with an additional 2.9% tax, 9.9% total, on gains exceeding $1 million, expected to generate $282 million over the 2025-27 biennium and $561 million over four years
- Increased the estate tax exemption from $2.193 million to $3 million; the rate for estates worth $9 million or more was increased from 20 to 35%
- Hiked the rental car sales tax from 5.9% to 11.9% in 2026
- An additional luxury tax on the sale, lease, or transfer of vehicles exceeding $100,000
- Created a B&O tax on the rental or lease of self-storage units at 1.5 % or 1.75 %, depending on transaction cost
- Increased the cost of a Discover Pass by 50%
- Expanded the tobacco tax to include nicotine pouches
- Raised hunting and fishing license fees by 38% and increased the cost of a combination fishing license from $45.50 to $62.49
- Increased taxes on health insurance
- Raised the cap on annual local property tax increases from 1% to 3%
- Imposed a 10% excise tax on duty-free stores
- A new ticket fee for sporting events and concerts
Initiative 960 passed in 2007 required non-binding public votes on tax increases enacted by the Legislature without voter approval. The advisory vote was repealed by the Legislature during the 2023 legislative session. In states like California and Colorado, voter approval is required for new taxes.
However, Orcutt noted that with public spending the increase doesn’t tell the full story, “since there was a major reform of education funding in 2017 in response to the McCleary lawsuit. Local levies were lowered in exchange for an increase in state funding to make it revenue neutral overall.”
In 2012, the State Supreme Court ruled via the McCleary decision that the state Legislature was failing to adhere to its constitutional mandate to fully fund K-12 education.
At the same time, Couture said that “when we had McCleary, we spent billions more dollars, but where did that money go?”
The Annie E. Casey Foundation currently ranks Washington 27th in the nation in education, a drop from 20th a decade ago.
Couture argues that the state Legislature has budgeted for years beyond the current revenue levels in the hope that economic growth will increase, noting that while revenue is still increasing “it’s just growing slowly. It’s basically calming down to realistic growth levels.”
The Center Square reached out to Sen. June Robinson, who is an ERFC member and serves as the chair for the Senate Ways & Means Committee, for comment on the state spending increases, any notable achievements as a result, and whether the spending levels were sustainable. The Center Square did not receive a response by the time of publication.
BIDEN AUTOPEN USE IN DC WAS MORE WIDESPREAD THAN PREVIOUSLY KNOWN
The Center Square also reached out to Gov. Bob Ferguson’s Office for comment regarding budget prioritization and spending level sustainability, but did not receive a response.
The Center Square reached out to Concerned Taxpayers of Washington State for comment, but did not receive a response. The Tax Foundation declined to comment for the story regarding the state spending increases, noting it’s beyond their scope of research.