This newsletter is the final one for the 2025 legislative session, even though the final status of some bills remains unclear because of the timeline for the Governor to sign bills. Before summarizing the session, our Lobby Team wants to thank all of you who’ve followed our work through this newsletter throughout the session and taken action as requested to support the bills that the League promoted. A huge thank you to all!

We also thank the legislature for their work throughout what nearly everyone has described as the most challenging in over a decade, if not longer. While there were many disappointments because of fiscal demands and policy differences within and among the House, Senate and Governor, the Legislature passed a budget that was balanced.

To put this work in perspective, note that 2387 bills were introduced between the House and Senate, and only 431 passed the Legislature. As of this writing, the Governor has signed 187 bills and has not vetoed any. The Governor has 20 days from the end of session to sign bills. These days include Saturdays but not Sundays or holidays.

Still up in the air are the revenue bills that were passed at the very end of the session. The Governor has not yet given a clear indication of whether he will sign the final budget or will veto parts of it.

This was the first session of the legislative biennium. Please note that bills that did not pass are still eligible for consideration in the 2026 legislative session.

Some features of the session include these:

The final $77.8 billion operating budget includes nearly $6 billion in cuts and nearly $9 billion in new revenue over the four-year outlook, significantly less revenue than the legislature’s majority Democrats had initially sought. Governor Ferguson previously rejected each version of the revenue plan, citing concerns that the proposals were “too risky.” The legislature’s spending plan leaves $2.3 billion in total reserves, about half of what the state treasurer recommends for a reserve level.
The capital budget includes $7.6 billion, with $4.5 billion from the sale of newly authorized, general-obligation bonds. It will leave $348.8 million in bond capacity for the 2026 supplemental capital budget. The capital budget, often called the state’s construction budget, will invest in K-12 school construction and maintenance, behavioral health facilities, infrastructure programs, affordable housing, natural resources, and higher education. It will also support community projects across the state.
The transportation budget will provide $15.5 billion and incorporate $1.3 billion in Climate Commitment Act funds. It relies on $3.2 billion in new taxes and fees, including a 6-cent gas tax increase.
The majority party tried to prioritize legislation protecting the state’s most vulnerable students through a safe and supportive school environment, provision of food, shelter, and health for the people of Washington. One of the only areas that saw new investment was K-12 education, where the cap for Special Education funding was removed and more funds were provided for the materials, supplies, and operating costs that help keep the schools running.

New revenue that was approved includes:

Increased Business and Occupation tax on certain activities: increases in surcharges on large businesses with taxable income over $250 million, on service businesses with taxable income over $5 million, on annual cap for the Advanced Computing Surcharge and surcharges on large financial institutions.
Sales & Tobacco Tax that expands the sales tax to certain services and broadens the tobacco tax to cover products that contain nicotine.
Increased Capital Gains Tax to include an additional 2.9% tax on capital gains over $1 million, increases tax on estates of those who died after January 1, 2025, and raises estate tax exclusion from $2.1 million to $3 million.
Other revenue sources include closures of a variety of tax exemptions, extension of the Business & Occupation tax to rental or lease of storage units and tax on the sale of electric vehicle credits between automakers.
In transportation, a $.06 increase in the gas tax and $.12 increase in diesel tax were passed to support existing commitments to major construction projects to address the more than 50% of roads and bridges needing maintenance as well as support ferries.

Environmental bills did well. Considering the budget challenges this session the environmental areas made progress, although much more could be done. The Climate Commitment Act revenue was largely protected from raiding for the general fund, the clean fuels program was strengthened, and gradual progress continues for cleaner buildings. Ten waste diversion bills passed.

There were fewer behavioral health bills introduced during this legislative session than in previous sessions, probably because of concerns about the budget. Of the six bills League supported, only one passed, HB 1432 Improving access to appropriate mental health and substance abuse disorder services.

In health care, many important bills did not pass; but the Operating Budget includes funding to support the Universal Health Care Commission, including $1 million from the Health Benefit Exchange (HBE) account to begin design work on the "bridge" (auto enrollment into HBE plans for those losing Medicaid funding; and immigrant health coverage funded at what appears to be current level.

Affordable housing and homelessness bills that passed included the rent stabilization bill, which should reduce the impacts of previous rent gouging practices on renters, and particularly those in mobile and manufactured homes renting the land beneath their structures. Additionally, there were bills supporting changes in land use that should make greater density and less expensive housing more easily available.

Education takes up nearly half of the roughly $77 billion two-year spending plan and includes $5 billion in appropriations for special-education programs that will address a strong need.

Early childhood education was unfortunately one of the programs that were not sustained at existing levels, though there were some bills passed to support families needing housing stability.

See much more in each of the weekly updates below, which are provided by our dedicated, hard-working and skilled issue chairs. The League is unique in having such diversity of issues that the Lobby Team follows. Each Issue Chair and Advocate is a volunteer with subject matter expertise who provides this intense service on behalf of the League’s adopted positions for months on end. Thank you to each and every member of the Team.