Washington’s current budget
Former Governor Jay Inslee released his
supplemental
FY 2026-2027 budget proposal in December 2024 and gave the
state
of state address in January 2025. Shortly after, Governor Bob
Ferguson took office. The
FY
2026-2027 budget was enacted in May 2025.
Washington enacted
its
FY
2024-2025 supplemental budget in March 2024. The budget reported $72
billion for general fund spending and $141 billion in total spending
over the two-year period. In
2025,
Washington state approved business tax increases as well as an increase
in the state’s gas tax.
Under the
American
Rescue Plan, Washington received $4.4 billion in direct state fiscal
aid and $2.2 billion in local government aid from the federal
government. As of
January
2025, Washington had fully allocated its state ARP. States must
spend the funds by Dec. 31, 2026.
According to the
National
Association of State Budget Officers (NASBO), Washington’s total
expenditures in fiscal year FY 2025 were $73.1 billion, including
general funds, other state funds, bonds, and federal funds. NASBO
reported that total expenditures across all states in FY 2025 were $2.9
trillion, ranging from $5.4 billion in Wyoming to $413.8 billion in
California.
According to NASBO,
Washington’s recent expenditure totals (general fund spending/total
spending, including federal transfers) were:
- FY 2025: $35.6 billion/$81.7 billion
- FY 2024: $32.4 billion/$74.7 billion
- FY 2023: $30.9 billion/$72.8 billion
- FY 2022: $28.1 billion/$66.4 billion
- FY 2021: $24.6 billion/$60.8 billion
- FY 2020: $24.0 billion/$54.5 billion
- FY 2019: $22.9 billion/$50.5 billion
For more on Washington’s budget, see
Washington’s budget institutions, rules, and constraints
Washington uses a
biennial
budget. The legislature must
pass
a balanced budget, but it can carry a deficit over into the
following year. Washington further
limits
spending growth with a
budget
rule based on inflation and population growth. The rule is binding
and requires a legislative supermajority to override it. Washington also
limits total
authorized
debt incurred by the state but does not limit debt service.
(Note: Some states have
informal
budget institutions that constrain overall spending growth or a
specific expenditure’s growth.)
Overview of Washington’s state and local expenditure and revenue
sources
Each state allocates spending and taxes differently among different
levels of governments, and local governments often administer programs
with state funds, so combined state and local government data show a
more complete picture of individual benefits and contributions when
comparing states.
Per the
US
Census Bureau, Washington’s combined state and local
direct
general expenditures were $99.5 billion in FY 2022 (the most recent
year census data were available), or $12,780 per capita. (Census data
exclude “business-like” activities such as utilities and transfers
between state and local governments.) National per capita direct general
expenditures were $12,083.
Washington’s largest spending areas per capita were
elementary
and secondary education ($2,762) and
public
welfare ($2,177). The Census Bureau includes most Medicaid spending
in public welfare but also allocates some of it to
public
hospitals. Per capita spending is useful for state comparisons but
is an
incomplete
metric because it doesn’t provide any information about a state’s
demographics, policy decisions, administrative procedures, or residents’
choices.
Washington’s combined state and local
general
revenues were $111.7 billion in FY 2022, or $14,351 per
capita. National per capita general revenues were $13,619. Washington
does not levy an
individual
income tax or
corporate
income tax but does have a
gross
receipts tax. (Census counts this revenue as either general sales
tax revenue or selective sales tax revenue.) After
federal
transfers, Washington’s largest sources of per capita revenue were
general
sales taxes ($3,581) and
charges
($2,623), such as state university tuition and highway tolls.
Washington’s economic trends
Washington’s
per
capita income (per the Bureau of Economic Analysis) was $83,938 in
2024, ranking seventh among the states. It was above both the national
average of $72,425 and the Far West regional average of $77,823. The
state’s
median
household income (five-year estimate) was $98,141 in 2024, ranking
seventh among the states and above the national average of $80,734.
Washington’s
poverty
rate was 9.9 percent in 2024 (five-year estimate), below the
national rate of 12.5 percent.
Although Washington’s averages tell a story about the entire state,
Washington is composed of diverse localities. For example, the city of
Pullman’s median household income was $46,812, and its poverty rate was
30.4 percent; the city of Sammamish’s median household income was
$239,690, and its poverty rate was 4.3 percent.
Washington’s
unemployment
rate historically tracks the national average, and in recent years
it has been among the highest in the country.
Unemployment rates (like other economic indicators) often
vary
significantly by race and ethnicity. In Washington, the average
unemployment rate in 2024 was 4.7 percent for white residents, 5.2
percent for Black residents, and 7.2 percent for Hispanic or Latino
residents.
The major industries that contributed the most to Washington’s
gross
domestic product (GDP) in 2024 were finance, information,
professional services, government, and retail. Information, government,
and retail contributed more to Washington’s GDP than they did to the
nation’s and region’s GDP, while finance and professional services were
less important to Washington than they were to the nation and region in
2024.
Looking at more specific industries, among those that accounted for
at least 1 percent of Washington’s GDP in 2023, publishing produced far
more for the state than for the nation, contributing 9.4 percent to
Washington’s GDP and 1.4 percent to the nation’s. Other industries that
overperformed in Washington relative to national averages in 2023 were
retail, data processing services, transportation equipment
manufacturing, and computer systems design.
Washington’s politics
Governor Bob Ferguson, a Democrat, was elected in 2024 with
56
percent of the vote. The next gubernatorial election is in 2028.
Democrats
control
both the House of Representatives (57 Democrats to 40 Republicans)
and Senate (28 Democrats to 20 Republicans). Control of the governor’s
mansion and each house of the legislature gives Democrats a
trifecta
in Washington. All Washington House seats are on the ballot in 2026
because representatives serve two-year terms. Senators serve four-year
terms; roughly half the senatorial seats are on the ballot in 2026, and
the other half will be up for election in 2028.
Washington’s demographics
As of July 2024, Washington’s population was 7,958,180. That was up
18 percent from 2010. The state’s population growth rate was faster than
than the nation’s 9.9 percent growth over the same period. The Urban
Institute
estimates
the state’s population will increase 24.7 percent between 2010 and 2030,
more than the nation’s estimated growth rate of 16 percent.
