By Jim Hedrick, GSI WA State Lobbyist and Spokane Regional Advocate
The legislature is heading into the final week of the regular session, constitutionally scheduled to end on Sunday, April 27. This week, the majorities introduced a revised revenue package, held public hearings and voted on bills that raise taxes and implement budgets. The legislature was also in floor sessions working bills that are in conflict by either concurring in the amendments from the opposite chamber or setting up conference committees to negotiate the final version of the bills.
Legislative budget writers are negotiating revenue and spending packages to get the legislature in a position to end the session on time. Governor Ferguson is seen an uncooperative by progressive Democrats as Thursday he made overtures that he is uncomfortable with the level of spending the legislature is proposing. Ferguson has come under growing legislative criticism by Democrats that he has not proposed any proposal to generate new revenue that he would support, while he has been praised by several Republicans for the same reason.
The Opposite House floor cutoff was on Wednesday. Senate Ways and Means Committee quickly transitioned to a 5:30pm Wednesday night hearing focused on new revenue proposals, underscoring the ongoing discussions about the state’s fiscal strategy and desperate budget situation.
Majority Democrats Propose New Revenue Measures
Democratic lawmakers are exploring several new tax proposals aimed at generating revenue for public services, education, and healthcare. But on Thursday afternoon, seventeen hours before the $12 billion tax package was set to be voted on in Senate Ways & Means, Governor Bob Ferguson voiced concerns in a press release, calling it “too risky.” Ferguson did not however present any level of revenue policy he would sign, or specific programmatic cuts he would recommend. Here are the key measures Democrats have proposed:
Capital Gains and Estate Taxes – SB 5813 (Wilson, D-30) / HB 2082 (Street, D-37)
- Example 1
- Example 2
- Example 3
- Adds a 2.9% excise tax on capital gains over $1 million, on top of the current 7%tax applied to gains over $270,000 (adjusted annually for inflation).
- Increases estate tax rates for individuals who pass away after January 1, 2025.
- Raises the estate tax exclusion from $2.1 million to $3 million. Revenue from this bill would go to the Education Legacy Trust Account.
- Passed Senate Ways & Means on 4/18.
Business and Occupation (B&O) Tax Surcharges – SB 5815 (Saldaña, D-37) / HB 2081 (Fitzgibbon, D-34)
- Increases B&O tax rates on sectors such as manufacturing, retail, child care, and gambling.
- Imposes a 0.5% surcharge on businesses with state income over $250 million.
- Raises rates on existing B&O surcharges. Funds would support public schools, higher education, healthcare, and social services.
- Was not considered in Senate Ways & Means on 4/18. Scheduled for executive session in House Finance on 4/19.
Property Tax Cap Adjustment – SB 5812 (Wellman, D-41) / HB 2049 (Bergquist, D-11) / HB 2081 (Fitzgibbon, D-34)
- Adjusts the annual 1% cap on property tax increases to allow for growth tied to inflation and population, capped at 3%.
- Revenue would support K–12 education, including special education.
- Was not considered in Senate Ways & Means on 4/18. Scheduled for executive session in House Finance on 4/19.
Sales Tax on Services and Nicotine Products – SB 5814 (Frame, D-36) / HB 2083 (Stonier, D-49)) / HB 2082 (Street, D-37)
- Expands the state’s sales and use tax to cover services like IT consulting and advertising.
- Includes all nicotine products, whether synthetic or tobacco-derived, under the tobacco products tax.
- Requires a one-time prepayment of state sales tax from businesses with $3 million+ in taxable retail sales in 2026. The revenue would support education, healthcare, social services, and other programs.
- Passed Senate Ways & Means on 4/18.
House Approves UI Benefits for Striking Workers
On Saturday, April 12, the House approved a bill to extend unemployment benefits to striking workers. SB 5041 (Riccelli, D-Spokane), was changed on the House floor with an amendment by Rep. Reeves (D-30), which reduced the duration of benefits from the Senate’s original 12 weeks to 4 weeks. The bill passed the House on a 52-43 vote, with seven Democrats (Bernbaum, D-Port Angeles) Entenman, D-Kent, Reed, D-Seattle, Richards D-Gig Harbor, Springer, D-Kirkland, 45 Tharinger, D-Sequim, and Walen, D-Bellevue joining Republicans in opposition. The legislation now heads back to the Senate, which must decide whether to accept the House’s revisions or challenge them. When the Senate passed the original version last month by a 28-21 margin, it narrowly defeated a similar proposal to shorten the benefit period to 4 weeks. Supporters argue that the bill would ease financial pressures on workers, helping them endure protracted labor disputes. Critics, however, contend that the policy might incentivize more strikes. If enacted, Washington would become the third state—after New Jersey and New York—to provide unemployment insurance to striking workers. A comparable measure is also under consideration in Oregon this year.
Recycling Reform Act Advances in House
In the early hours of Tuesday morning, the House passed SB 5284 (Lovelett, D-Bellingham), which mandates that producers of specific paper products and packaging materials must join and financially support a Producer Responsibility Organization (PRO). This organization will be tasked with overseeing the post-consumer management of these covered products, ensuring they are properly collected, sorted, and recycled. In addition to waste processing, the PRO will also coordinate other recycling-related initiatives aimed at reducing environmental impact and improving the efficiency of the state’s materials recovery systems. 8 Democrats joined Republicans in voting against the measure: Representatives Bronoske, D-Lakewood, Fey, D-Tacoma, Leavitt, D-Lakewood Morgan, D-Tacoma, Reeves, D-Federal Way, Richards, D-Gig Harbor, Rule, D-Whatcom County, Wylie, D-Vancouver. The bill was amended and must return to the Senate. If passed, Washington will become the seventh state to adopt laws establishing Extended Producer Responsibility (EPR) for packaging, joining Maine, Oregon, California, Colorado, Maryland, and Minnesota.If the first house disagrees with the second house, it can ask the second house to recede from the amendments. If the second house recedes, the bill has passed the Legislature. If the two houses cannot resolve their differences, one of them can ask for a conference committee. Members from each house meet to discuss the differences. If they agree on what is to be done, the conference committee makes a report. Both houses must adopt the conference committee report for the bill to pass the Legislature. If one house does not adopt the conference committee report (whether by vote or inaction), the bill has not passed.
Rent Control
HB 1217 is on the House Concurrence – Dispute Calendar awaiting a full vote of the House to either concur in the Senate amendments or send the bill to a conference committee. House Speaker Laurie Jinkins has made in it known she and progressives Democrats in the House and Senate want the bill to get to a conference committee. 1217 got out of the house on a near party-line vote 29-20 (1 D voting no) but is regarded as a tenuous vote where several members could hinge on one issue, notably the rate at which rents can be raised. The Senate ended up voting for a version of the bill allowing a rent cap that can grow at 10% plus inflation per year. A version of the bill favored by more progressives set the increase at a hard 7% annual cap.
If the House votes to accept the Senate version of the bill with the less restrictive cap the bill would be passed by the legislature and to the governor for action. If sent to a conference committee the bill would likely offer a more strict 7% or lower cap. This runs the risk of losing key votes in the Senate and could place the entire bill in jeopardy of not having enough votes to pass the legislature this year at all.
It is a high stakes political call as Democrats have prioritized a rent control bill for low- and middle- income renters as a major policy objective this session. A stronger bill may be possible but runs the risk of losing the issue entirely for another year.
2025 Legislative Races
While House members and roughly half of the Senate are not up for regular election until 2026, several districts in Washington are seeing heightened political activity in 2025 due to a 2024 wave of retirements, appointments, and incumbents pursuing other offices. These changes have opened up key legislative seats, sparking competitive races that will help shape the state’s political landscape. Below is a breakdown of the most notable contests that will begin after session (and any potential special session) adjourns:
District 48 (Bellevue, Medina, Redmond, Kirkland)
Senator Patty Kuderer (D) successfully ran for Insurance Commissioner in 2024, leaving her Senate seat vacant. Representative Vandana Slatter (D) was appointed to fill the role, but she must now defend it in the upcoming election. Notably, Slatter faces a primary challenge from fellow Democrat Representative Amy Walen, setting the stage for a contentious intra-party battle. The race is expected to be both high-profile and high-spending, with business interests aligning behind Walen, while progressive groups are likely throwing their support behind Slatter.
District 26 (Port Orchard, Gig Harbor, Olalla)
Senator Emily Randall (D) transitioned to the federal level, winning election to Congress in 2024. Her Senate seat was filled by appointment with Deborah Krishnadasen (D), who now faces a tough race to hold the position. She will be challenged by seasoned door-beller Representative Michelle Caldier (R), setting up one of the most competitive Senate battles in the state. District 26 is a genuine swing district, and both parties are expected to invest heavily, making this a race to watch.
District 34 (West Seattle, White Center, Vashon Island)
With Senator Joe Nguyễn accepting an appointment to lead the state Department of Commerce, his Senate seat became available earlier this year. Representative Emily Alvarado (D) was appointed to succeed him and will appear on the ballot to secure a full term. Alvarado’s move to the Senate created a vacancy in the House, which was filled by Brianna Thomas (D), a prominent local leader. Thomas will also need to run this year to retain her seat.
District 33 (Burien, SeaTac, Kent, Des Moines)
Following the retirement of longtime Senator Karen Keiser (D) in 2024, Representative Tina Orwall (D) was tapped to fill the vacant Senate seat. Orwall will need to campaign to keep her new position. Her appointment in turn opened up a House seat, which has been filled by Edwin Obras (D). Obras will also face voters this year to keep the role.
District 41 (Mercer Island, Newcastle, Sammamish, Bellevue)
Representative Tana Senn (D) was appointed to lead the Department of Children, Youth & Families, creating a vacancy in the House. The open seat was filled by Janice Zahn (D) who now must campaign in the 2025 election to retain her position.
The Week Ahead
It is difficult to know how to “crystal ball” the week ahead. Legislative Democrats are working hard to get the legislature out on time with a 2-year budget plan and sustainable revenue but without further guidance from Governor Ferguson on what level of spending, what level of new revenue, or what level of budget reductions he’s comfortable with in a final budget package; special session is looking more imminent.
About the Author
Jim Hedrick is GSI’s State Lobbyist and Owner of H2 Government Relations. Jim has advocated on behalf of our community for more than 20 years and has 25 years of experience in the Washington State legislative and public policy venue as a fiscal analyst, legislative advocate, and political advisor to the Governor, state agency directors, and legislative officials.
About this Blog
As part of GSI’s year-round work with our community to advance policies that support the success of local businesses, we’re active in Washington State’s current legislative session – tracking bills, advocating on behalf of our community, planning our annual trip to Olympia, communicating our State Agenda, and working with our lobbyist, our Regional Advocacy Committee, and our elected officials, to advance priorities that support local businesses and enhance our community. Learn more about what we do to create a greater voice for the future of our region and view this year’s State Agenda.