Budget Analysis
On March 24, the Senate and House released their respective proposed Operating Budgets, PSSB 5167 (Robinson) and PSHB 1198 (Ormsby).
We have included our initial comparison analysis of both budgets. A few notes:
- These are very complicated and complex budget documents, so it is likely we may have misread some details. Feel free to bring questions to our attention and we will include updates and corrections in an upcoming Notes from Olympia.
- The numbers presented include two years of funding for the 2025-27 biennium. If you would like further detail, please reach out.
- The base of the table is Maintenance Level funding, so any reductions are cost savings achieved from reductions from Maintenance Level and new investments are those above what was included in Maintenance Level.
- While funding for early learning and child care does include reductions, many of these are cost avoidance achieved through delayed implementation of upcoming milestones in the Fair Start for Kids Act. Pending legislation (ESSB 5752/HB 1489) would delay these Fair Start provisions.
Budget Highlights
The Senate’s $78.5 billion 2025-27 biennial budget is predicated upon $3 billion in cuts/reductions and $6.2 billion in new revenue in the upcoming biennium. The budget would tap $1.6 billion from the state’s Rainy Day Fund in State Fiscal Year 2026, with a pledge to pay the funds back in the following fiscal year. The budget includes plans to leave a $7.6 billion reserve at the end of state fiscal year 2029.
The Senate budget proposes state employee furloughs of 13 unpaid days for one year (the equivalent of a 5 percent pay cut). Their budget invests more than the House in education (particularly in special education) and does not include the $100 million in new funding for law enforcement that is a priority of Governor Ferguson.
The House’s $77.8 billion 2025-27 biennial budget would leave a total ending fund balance of $3.2 billion. Its budget is predicated upon $5.2 billion in new revenue. The House budget does include new funding for law enforcement and while it includes new funding for education, it includes less than the Senate. The House budget does not include salary reductions or require furlough days for state employees.
Quick Thoughts on Budget Approaches to Early Learning
- Areas of Alignment. The two bodies appear to be in alignment on the major cost drivers – delaying expanded eligibility for ECEAP and Working Connections Child Care; pausing additional Transition to Kindergarten enrollment while preserving current enrollment; and delaying by one year Working Connections Child Care rate increases to the 85th percentile of the 2024 Market Rate Survey (MRS).
- Senate invests more in ECEAP. By frontloading a 10% rate increase in year one, the Senate invests ~$10M more in ECEAP rates and invests substantially more dollars in ECEAP slots.
- Senate budget reflects ESSB 5752 approach. As expected, the Senate budget reflects the ESSB 5752 approach and includes more specific budget reductions, particularly in Working Connections Child Care “auxiliary” programs, than the House.
There is ample room for conversation and negotiation!
Check out Friday’s Notes from Olympia for a more thorough review of the budget approaches and The Washington State Standard coverage of the budget unveilings.
And a personal note of thanks to fiscal and agency staff and lobbying colleagues for helping build this document in a short timeframe. Any errors are mine.
