Legislative Session Update: Week 2 (January 19-23, 2026)

By Jim Hedrick, GSI WA State Lobbyist and Spokane Regional Advocate

Week two of the 2026 short legislative session was marked by intense activity as lawmakers worked within a highly compressed short session timeline. In a short session, bills have only 24 days to be introduced, heard in committee, potentially amended, and voted on before they can be advanced to the Rules Committee and then the floor. Most House and Senate committees meet approximately a dozen times during this window, which makes time a constant constraint for legislators, staff, advocates, and stakeholders alike.

This week also brought notable retirement announcements for 2026 including Sen. Steve Conway (D-Tacoma) and Rep. Sharon Wylie (D-Vancouver) as well as news that Rep. Sharlett Mena (D-Tacoma) will run for Conway’s seat and Sen. Nikki Torres (R-Yakima Valley) will abandon her bid in the 15th legislative district, and run in the 8th legislative district (Tri-Cities), as current 8th district Senator Matt Boehnke (R-Richland) announced his intention to run for the open seat in the 4thcongressional district.

Millionaires’ Tax

On Monday, January 19, Senate Majority Leader Sen. Jamie Pedersen (D‑Seattle) circulated a draft proposal of the much‑anticipated “millionaire tax” to interest groups. While still in draft form, the proposal offers an early look at a significant new revenue concept under consideration. The tax would take effect in 2029 and impose a 9.9% tax on Washington taxable income above a $1 million standard deduction per taxpayer. Married couples or state-registered domestic partners would share a single $1 million cap.

The threshold would be indexed for inflation, and the tax would be prorated for nonresidents. The release of the draft reflects broader legislative discussions about how to address long‑term budget pressures at both the state and local levels. With constrained revenues and increasing demands for public services, lawmakers are evaluating a range of revenue options alongside spending priorities.

Transportation

Transportation funding featured prominently this week, particularly in the context of Sound Transit’s long‑term financial challenges. Like many regional authorities, Sound Transit is contending with rising construction costs, revenue uncertainty, and the fiscal realities of delivering voter‑approved projects under its Sound Transit 3 (ST3) expansion plan, which extends through 2046.

On Monday, January 19, the Senate Transportation Committee heard SB 6148 (Liias, D‑Mukilteo). The bill would authorize Sound Transit to issue general obligation bonds with terms of up to 75 years, a significant increase from the current 40‑year limit. Supporters argue that longer bond terms could provide the agency with additional flexibility to finance major capital projects – such as light rail extensions – by spreading debt service payments over a longer period.

Even with this authority, Sound Transit would still be required to secure 60% voter approval to issue new debt that exceeds its statutory limit of 1.5% of assessed property value. The bill also includes a notable trade‑off: if Sound Transit issues bonds with terms longer than 40 years, it would become ineligible for certain state Regional Mobility Grant funds. This provision could reduce access to supplemental state funding for future capital projects.

Locals Need Money Too

On Tuesday, January 20, the House Finance Committee heard HB 2442 (Berg, D‑Mill Creek), a wide‑ranging bill designed to expand local governments’ ability to raise and use revenue for public priorities. The bill authorizes cities and counties to impose additional real estate excise taxes-up to 0.25% for general capital projects and up to 0.5% for affordable housing. It also allows counties to create a utility tax of up to 3%, with a portion of revenues dedicated to low‑income utility assistance.

In addition, HB 2442 permits local governments to adopt local sales and use taxes to support childcare, youth mental health services, workforce development programs, housing, and transportation. The bill updates existing housing and behavioral health tax authorities to prioritize certain populations and to require community engagement in planning and implementation. It also extends the allowable duration of voter‑approved property tax levies beyond normal limits, allowing them to run for up to 10 years.

Payroll Tax

On Thursday, January 22, the House Finance Committee heard HB 2100 (Scott, D‑Seattle), also known as the Payroll Tax or the Well Washington Fund Act, depending on which side of the issue one supports. The bill proposes a new excise tax on large employers to support state public services. Specifically, it would impose a 5% tax on payroll above approximately $125,000 per employee for companies with more than 20 employees, more than $5 million in gross receipts, and a U.S. address. Employers with total wages under $7 million would be exempt. Initially, revenue from the tax would be deposited into the state general fund.

Beginning in mid‑2027, however, 51% of the revenue would be directed to a newly created Well Washington Fund. The fund would support investments in higher education, health care, cash assistance programs, energy initiatives, and housing. The remaining revenue would continue to support the general fund.

Tourism

Tourism policy also received attention this week. Washington officially closed its state tourism office on June 30, 2011, during a period of budget cuts, becoming the only state without state‑funded tourism promotion. Since then, nonprofit organizations and industry partners have taken on a greater role in marketing the state as a destination, recognizing tourism as an important driver of hospitality and related economic activity.

Two tourism‑related bills were heard this week: HB 2278 (Barnard, R‑Kennewick) and HB 2325 (Paul, D‑Whidbey Island). While both aim to support tourism, they operate at different levels. HB 2278 would provide local governments with more flexibility to fund tourism promotion by allowing an additional lodging assessment of up to $3 per night in designated tourism areas. To implement the assessment, lodging operators responsible for at least 60% of the proposed charges must approve the proposal, and the plan must clearly outline intended uses of the revenue and estimated costs.

HB 2325, by contrast, establishes a voluntary, industry‑led statewide tourism assessment program. The program would be overseen by a board of business representatives, with assessment rates based on gross revenue from lodging, attractions, and travel services. Funds would be deposited into a dedicated account for statewide tourism marketing. Businesses would be required to ratify any assessment through referenda before collection. Together, the bills seek to strengthen both local and statewide tourism promotion through targeted, business‑supported funding mechanisms.

Collective Bargaining

The labor community mobilized this week in support of HB 2471 (Scott, D‑Seattle), which would create a state‑level framework for collective bargaining in private‑sector workplaces not covered by federal law, including the National Labor Relations Act or the Railway Labor Act. Because federal law preempts most private‑sector labor relations, Washington currently lacks a general state framework for these workers. HB 2471 would establish such a framework, providing legal protections and a defined process for union organizing and collective bargaining under state law where federal jurisdiction does not apply. Existing collective bargaining agreements would remain enforceable once state jurisdiction takes effect. Supporters argue the bill would extend labor protections to workers who currently fall outside federal coverage.

Bottle Bill

On Wednesday, the House Environment & Energy Committee heard 2SHB 1607 (Stonier, D‑Vancouver), a proposal to establish a statewide beverage container recycling refund and producer responsibility program. The bill would require beverage producers to join or form a nonprofit producer responsibility organization (PRO) responsible for operating the refund system, funding the program, and ensuring adequate redemption infrastructure. Consumers would receive refunds for returning covered containers, while material recovery facilities would receive monthly payments for processed materials to promote high‑quality recycling.

The PRO would be required to achieve redemption rates of more than 65% by year two and 80% by year five, with oversight by the Department of Ecology and a recycling refund advisory council. Producers would register and prepare in 2026, with program launch anticipated in 2029.

Data Centers

On Thursday, the same committee heard HB 2515 (Doglio, D‑Olympia), which establishes a framework for regulating emerging large energy‑use facilities, such as data centers. The bill responds to the rapid growth of these facilities and their potential impacts on communities, the environment, and the power grid. It requires utilities to submit tariffs and contracts for regulatory approval and ensures that service to large energy users does not compromise grid reliability or affordability for other customers. Facility owners would also be required to publish public sustainability reports detailing energy and water use, cooling technologies, and environmental performance.

Next Week

Next week, the Senate is expected to vote on SB 5067 off the floor, a bill that would reduce the blood alcohol concentration (BAC) limit from 0.08 to 0.05 for driving while under the influence of liquor. The bill was introduced last year by Sen. John Lovick (D-Montlake Terrace) a former Washington State Trooper. The bill may stall out as it did last year due to fiscal considerations.

Committees will have full week’s work continuing to hear, markup, and vote on bills as the legislature works towards is first cutoff on February 4.