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Washington Governor Signs Budget Amid Looming Financial Challenges
Budget relies on rainy day reserves and cuts to child care funding to balance the books
Apr. 2, 2026 at 6:30am
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Washington Governor Bob Ferguson has signed a $79.4 billion state budget that makes adjustments to the previous two-year spending plan. The budget relies on one-time maneuvers and deep cuts to child care funding to balance, as the state faces growing demand for public services, rising legal liabilities, and a looming deficit in the next budget cycle.
Why it matters
The budget reflects the difficult financial realities facing Washington state, with revenue growth not keeping pace with spending demands. The governor and lawmakers will have to confront a projected $878 million deficit in the next budget cycle, raising questions about the state's long-term fiscal sustainability.
The details
The budget withdraws $880 million from the state's rainy day reserves and transfers $375 million from the Public Works Assistance Account to help balance the books. It also includes a $143 million reduction for child care providers serving low-income families, as well as cuts to public education programs. While universities and community colleges avoided major hits, the budget does not provide the expected $100 per-student increase in local effort assistance for eligible school districts.
- The new two-year budget covers state spending from July 1, 2025, to June 30, 2027.
- Revenue from the new tax on households with annual incomes above $1 million won't begin for three years.
- The state plans to sweep $880 million from the reserves of an overfunded pension plan for police and firefighters in 2029 to backfill the rainy day savings account.
The players
Bob Ferguson
The governor of Washington who signed the new state budget.
June Robinson
A Democratic state senator from Everett who was involved in the budget negotiations.
Timm Ormsby
A Democratic state representative from Spokane who was the lead budget writer in the state House.
Mari Leavitt
A Democratic state representative from Tacoma who criticized the governor's veto of funding for a program to combat organized retail crime.
What they’re saying
“That does not help us for what we have to do right here.”
— Bob Ferguson, Governor
“If the decision is made, it's shortsighted and suggests that retail crime doesn't matter in Washington.”
— Mari Leavitt, State Representative
“Given the circumstances we're facing, this is a responsible budget. We'll have a lot of work to do in the coming months. We'll adapt to whatever comes our way.”
— Bob Ferguson, Governor
What’s next
The governor and lawmakers will have to confront a projected $878 million deficit in the 2028 budget cycle, raising questions about the state's long-term fiscal sustainability.
The takeaway
The new Washington state budget reflects the difficult financial realities facing the state, with revenue growth not keeping pace with spending demands. The reliance on one-time maneuvers and deep cuts to programs like child care funding highlights the need for the governor and lawmakers to find sustainable solutions to address the state's looming budget challenges.
