‘All bad news’: WA tax receipts expected to slide further

Washington’s projected tax collections are down more than $500 million, raising concerns about cuts to state services and possible tax increases in the next legislative session. — The Washington state Capitol on July 25, 2025. Photo courtesy Jerry Cornfield/Washington State Standard

Projected tax revenue is down more than $500 million since the Legislature passed its latest two-year budget; One lead budget writer isn’t ruling out further tax increases next year

Jake Goldstein-Street
Washington State Standard

Projected tax collections in Washington continue to fall steeply, with declines totaling more than $500 million since the governor signed off on billions of dollars in tax increases earlier this year to help balance the budget.

Estimates shared with officials Tuesday show receipts for the current two-year state budget tumbling $412 million further from what was forecast three months ago. Incorporating the previous forecast from June, this puts the total slide over half-a-billion dollars.

The troubling report from Dave Reich, the state’s chief economist, to the Economic and Revenue Forecast Council sets the stage for another legislative session marred by tough budget decisions, with the potential for further cuts to state services and higher taxes.

Sen. June Robinson, the lead budget writer in the Senate, said it’s “all bad news” that will make figuring out a supplemental budget plan next year “that much harder.”

With months until the next legislative session begins in January, it’s still early, but Robinson said lawmakers “may look at tax levers” again.

“We did take significant steps in that direction, those haven’t all played out, so I’m not sure there will be a big appetite to do a lot in the revenue space,” said Robinson, D-Everett, in an interview. “We really scoured all the agencies earlier this year for any savings and reductions that were tenable, so it just means we have to go deeper.”

Rep. Ed Orcutt, R-Kalama, said the forecast is a “huge concern” and means the new budget passed earlier this year is already underwater. He called for budget writers and the governor to come into the next legislative session with ideas for further spending cuts to make ends meet.

“Increasing taxes has not resolved the deficit problem, so maybe it’s time we look at the other side of the equation,” Orcutt said.

Gov. Bob Ferguson called the new projections “disappointing but not surprising.”

“As I write my first budget, I will be focused on delivering a balanced budget that maintains core services to the people of our state,” he said in a statement.

This story was first published by the Washington State Standard.