News

Legislative Session Update: Week 7 – February 24-28, 2025

March 4, 2025

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

The most significant development of the week wasn’t just the hearings and fiscal committee actions—it was Governor Bob Ferguson’s news conference, where he outlined approximately $4 billion in additional budget cuts for the legislature to consider. These cuts, in addition to those in Governor Inslee’s proposed budget, could cover nearly half of the state’s projected budget shortfall.

Currently, the state operates on a balanced budget that extends through June 30, 2025. However, the primary focus of the 2025 legislative session is crafting a new operating budget for the following two years. A significant challenge looms: a projected $15 billion gap between expected tax revenue over the next four years and the state’s existing financial commitments, including funding for early-education, K-12 and higher education, health care, behavioral health, corrections, human services, and natural resources.

Last Friday House Democrats launched a public campaign advocating for new revenue, unveiling a website illustrating what a “no-revenue” all cuts budget would look like under Governor Inslee’s proposal. To understand the implications of a prior governor’s budget, this website, and Governor Ferguson’s cost-cutting approach, it’s important to review how Washington State’s budgeting process works.

How Did We Get Here?

The budget process begins in the Fall when state agencies submit funding requests to the Office of Financial Management (OFM). By law, the current governor must propose a four-year budget in December that does not assume new revenue or changes to existing law. This initial proposal, drafted by Governor Inslee’s administration, known as the “Book 1 Budget,” is a stark starting point—this year it includes $12 billion in cuts, such as $3.5 billion from health care, $1.3 billion for human services an early childhood learning, and over $1 billion from higher education.

The legislature, constitutionally required to pass a balanced budget, will use the governor’s budget as a foundation. On March 18, the updated quarterly revenue and caseload forecasts will inform legislators to develop their own budget proposals in each the House and the Senate, incorporating spending reductions and potential revenue measures. The final budget must be approved by April 27, or the legislature could face one or more special sessions. And of course, the governor must agree to sign it into law.

Governor Ferguson’s Cost-Cutting Approach

Governor Ferguson has proposed a cost-reduction framework focused on improving efficiency before considering new revenue options. Ferguson’s plan includes consolidating agency management roles by 10-25 percent, cutting administrative positions, limiting equipment purchases, and reducing travel expenses. Ferguson said in his Thursday new conference he made it a priority not to take cuts in K-12 education and public safety. Also, Ferguson continues to emphasize, “Washingtonians expect that we will increase revenue as a last resort… I will not start contemplating additional revenue options until we have exhausted efforts to improve efficiency.” His stance, widely seen as a critique of past Democratic- led budgets, has created tension with majority party leaders. House Democrats, in particular, have reacted negatively, barring the governor’s policy advisors from legislative discussions in the wings without explicit invitations.

Pushback from Advocates

Even prior to this week’s announcement, Ferguson’s proposed cuts have drawn sharp criticism in the legislative arena. For example, OFM-request bill HB 1476 (Ormsby, D-Spokane) seeks to delay nursing home rate adjustments until 2028. At a recent House Appropriations Committee hearing, SEIU 775 and representatives from 29 nursing homes strongly opposed the measure, arguing it would devastate facilities already struggling with rising costs. Of the 650 people who signed in, only three supported the bill. Among 30 testifiers, not one spoke in favor, aside from OFM representatives.

In response to the governor’s cost-cutting proposals, Senate Ways & Means Chair Senator June Robinson (D-Everett) issued a statement: “We appreciate the work the governor and state agencies have done to reach this point. Like them, we recognize that budget reductions are necessary and will carefully consider all the options that have been identified. But we have also reached the conclusion that reductions alone will not allow us to sustain the services Washingtonians rely on. People expect a government that remains functional and responsive, especially in times of federal instability.

Our job is to take a balanced approach — one that ensures critical services remain strong and communities have the support they need. To truly meet the needs of the people we serve, we must make thoughtful reductions and consider progressive revenue options that ensure fairness and long- term stability. We will continue advocating for a budget that upholds our shared values and keeps Washington moving forward.”

$4 Billion in Cuts

In developing the $4 billion in Ferguson’s proposed cuts, state agencies were instructed to assess programs based on specific criteria, targeting recently launched programs, those funded by temporary federal aid, programs over four years old, services reaching fewer than 1,000 people annually, and programs lacking performance tracking or mandated by legislation. These efforts will continue shaping the budget debate in the coming weeks as lawmakers determine how to close the state’s significant financial gap.

Cutoff

Friday served as the fiscal committee cutoff whereby bills referred to fiscal committees had to be approved by those committees. Many bills died on Friday for failure to come to a committee vote. The first committee phase of the 2025 legislature is now complete. Next week both the House and Senate will engage in floor action – caucusing, amending, debating, and voting on bills by the full House and Senate. This phase of the legislative process will occur until the next cutoff on Wednesday, March 12. This is the house or origin cutoff, the procedural mid-point of the legislative process.

Bills That Got Out…Barely

A bill that would grant unemployment insurance (UI) benefits for up to 26 weeks to striking workers got out of the Senate Ways & Means Committee on a party-line vote. Senate Bill 5041 (Riccelli, D-Spokane) has become very controversial as proponents say this concept has worked well in New York and New Jersey, the only states that have enacted similar legislation. 5041 aims to keep those out of work due to a strike more financially sustainable. The Olympia business lobby adamantly opposes the bill saying it tips the scales in labor-management negotiations, invites employees to strike, and the company that is subject to the strike picks up all the UI costs. The costs would not social across all employers. 5041 will go the Senate Rules Committee and is expected to be taken up by the full Senate next week.

A bill meant to keep private equity interests from purchasing health care facilities and limit the influence of Catholic hospitals on clinical decisions is Senate Bill 5387 (Robinson, D-Everett). 5387 would prohibit the corporate practice of health care except through a professional service corporation or limited liability company and prohibits individuals not licensed to practice a health care profession from interfering with the clinical decision-making of health care providers providing care at licensed facilities. The bill is opposed by health care interests arguing the bill would limit financial investment from management service organizations (MSOs) that address financial, infrastructure and other capital needs that are critical to the health care delivery system. MSOs do what a licensed provider cannot do for themselves. The financial support from these MSOs expands access to care. SSB 5387 was approved by the Senate Ways & Means Committee on a near party line vote with Democrat Senator Annette Cleveland voting ‘no’ who is the Chair of the Senate Health Care Committee. All Republicans on the committee voted against the bill. There is a continued push by hospitals, clinics, and physician provider groups to lay the bill down so as not to come to a vote of the full Senate.

HB 1380 (Gregerson, D-Des Moines) would require local government ordinances that regulate the acts of sitting, lying, sleeping, or keeping warm and dry outdoors on public property that is open to the public as to time, place, and manner to be “objectively reasonable.” Designed as a frontal assault on the U.S. Supreme Court’s Grants Pass decision where the court found local government ordinances with civil and criminal penalties for camping on public land do not constitute cruel and unusual punishment of homeless people. Proponents argue the bill is critical for protecting the rights of persons experiencing homelessness in the state. Opposition has come from many of the state’s cities and counties arguing if “objective reasonable” is not defined more precisely, 1380 will result in unnecessary litigation. The local governments point to the provisions of the bill that create a private cause of action for injunctive or declaratory relief to challenge the objective reasonableness of the local ordinance. The bill was amended in the House Appropriations Committee to specify the objective reasonableness requirement applies not only to the local laws themselves, but also to the enforcement of any such local laws. Two Democrats voted no on the bill along with all the Republicans. HB 1380 will go the House Rules Committee for further consideration and is expected to come to a full vote of the House.

Next week will be full tilt floor action with long days into the night. Bills with any spending are scrutinized and every bill that came out of the House Appropriation Committee was amended with a null & void clause, meaning if money is not appropriated in the budget, the bill has no force of law.

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.

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