Legislative Report
By Boswell Consulting
The legislature now has less than 40 days remaining in the 2025 session. Bills must now move forward in the opposite chamber, progressing through policy and fiscal committees. The opposite house policy cutoff is next week, and then both chambers will return to the floor to debate bills before the opposite floor cutoff on April 16.
Revenue Update
The Washington State Economic and Revenue Forecast Council released its March 18 forecast, which highlighted a mixed economic outlook with slowing growth and notable risks. Revenue collections since November 2024 were slightly higher than forecasted, yet overall projections for future biennia have been lowered due to reduced sales, B&O taxes, and interest revenues. The General Fund State revenue forecast dropped by $0.5 million for 2023-25, $665 million for 2025-27, and $579 million for 2027-29.
Washington state also released its Transportation Revenue Forecast, projecting total transportation revenues of $6.85 billion for the 2023-25 biennium, a $49 million (0.7%) increase from the previous forecast. For the 2025-27 biennium, revenues are forecasted at $7.10 billion, up by $114 million (1.6%), and $7.24 billion for 2027-29, marking a $121 million (1.7%) rise. This growth stems from slower declines in gasoline consumption. Ferry revenues are also up due to increased ridership, while license, permit, and fee revenues slightly declined. Toll revenue forecasts remain unchanged.
On Thursday, the Senate Democrats released a $17 billion tax package, which included a wealth tax, a statewide payroll tax, a proposal to raise the property tax growth limit, a repeal of twenty tax exemptions, and a decrease in the state sales tax. On Friday morning, the House Democrats released their proposed revenue package, which included a wealth tax, an increase in the property tax growth limit, a 1% B&O surcharge on high-grossing corporations, and a B&O increase on financial institutions with an annual net income of $1 billion. The House Democrats’ proposal would generate $5.1 billion for the 2025-27 budget and $14.8 billion over the next two budgets. These revenue packages were released as a precursor to their respective spending proposals that will be released next week.
The House and Senate Operating, Transportation and Capital budget proposals are expected to be released on March 24. Both the House and Senate must negotiate and agree on a final budget and revenue plan by the end of the legislative session on April 27. The budget then needs to be signed by Gov. Bob Ferguson.
Please see below for key insights from week 10:
Employment Law
Senate Bill 5041 seeks to extend unemployment benefits to employees involved in strikes and lockouts, remove certain disqualifications, and shift the financial responsibility for benefits to the employer involved in the labor dispute. A public hearing was held in the House Labor & Workplace Standards Committee on March 18, and received a do pass recommendation during executive session on March 21.
House Bill 1213 focuses on expanding employee protections and clarifying employer responsibilities under Washington’s Paid Family and Medical Leave program, with an effective date of Jan. 1, 2026. The bill was scheduled for a hearing in the Senate Labor & Commerce Committee March 24.
Taxes/Budget
House Bill 2046 establishes a tax on financial intangible assets exceeding $50 million to fund education programs. The tax, effective Jan. 1, 2026, applies to Washington residents at a rate of $8 per $1,000 of the true and fair value of their taxable worldwide intangible assets, with specific exemptions and provisions for administration and enforcement. Revenue generated will be dedicated to the education legacy trust account supporting K-12 schools, higher education, early learning, and childcare programs. This newly introduced legislation has yet to be scheduled for a hearing.
Senate Bill 5791increases the general B&O tax rate from 1.75% to 1.8% and raises the allocation of revenue deposited into the Workforce Education Investment Account from 14.3% to 16.67%. These changes aim to enhance state funding for higher education and are scheduled to take effect on Oct. 1, 2025. The bill was introduced on March 19 but has yet to be scheduled for a hearing.
Senate Bill 5796 establishes a payroll expense tax on large employers to fund public services and address the regressivity of Washington’s tax system. The tax applies to wages exceeding the Social Security taxable maximum, with a 5% rate effective July 1, 2026, and exempts employers with annual payrolls of $7 million or less. Funds collected will support education, health care, and social services, while reducing reliance on the business and occupation tax. The bill was introduced on March 21 but has yet to be scheduled for a hearing.
Senate Bill 5797 establishes a tax on high-value intangible assets owned by Washington residents to fund public schools. The bill includes exemptions for residents with less than $50 million in combined worldwide intangible assets and outlines administrative provisions for filing, penalties, and enforcement. SB 5797 creates a new Title 84A RCW to codify these tax measures. This bill has yet to be scheduled for a hearing.
Senate Bill 5798 proposes comprehensive reforms to Washington state’s property tax system by increasing revenue growth limits through inflation and population adjustments, expanding tax relief for seniors, and improving transparency in state property tax statements. The bill aims to address funding challenges for public services while offering targeted relief to senior citizens. This bill has yet to be scheduled for a hearing.
Housing
House Bill 1217 seeks to cap annual rent and fee increases at 7%, enhance tenant protections, and establish new notice requirements for landlords under Washington’s landlord-tenant laws. The bill had a public hearing in the Senate Housing Committee on March 19 and is scheduled for executive session at 10:30 a.m. on March 26.
House Bill 1491 mandates higher-density, transit-oriented development, requiring cities to adopt regulations that facilitate multifamily housing and mixed-use projects in designated station areas. Executive session is scheduled in the Senate Housing Committee on March 26 at 10:30 AM.
House Bill 1494 refines property tax exemption criteria for multi-unit housing to prioritize affordability and anti-displacement measures. The bill updates definitions, eligibility, and administrative processes, emphasizing affordability requirements, transit proximity, and compliance mechanisms for local governments and property owners. A public hearing was held in the Senate Ways & Means Committee on March 13 but has yet to be scheduled for executive session.
Economic Development
Senate Bill 5492 creates an advisory group to evaluate a sustainable tourism funding mechanism. A public hearing was held in the House Committee on Technology, Economic Development, & Veterans on March 18, and the bill received a do pass recommendation on March 21.
House Bill 1515 seeks to expand alcohol service options in public spaces and civic campuses, including shared outdoor and indoor service areas and a new license for nonprofit organizations to serve alcohol at community events. The bill is scheduled for a hearing in the Senate Labor & Commerce Committee at 10:30 a.m. on Tuesday, March 25.
Senate Bill 5677 increases funding for associate development organizations and standardizes performance reporting requirements statewide. A public hearing was held in the House Committee on Technology, Economic Development, & Veterans on March 18 and received a do pass recommendation on March 21.
Important Session Dates
- March 31, 2025: Opposite House Fiscal Cutoff
- April 9, 2025: Opposite House Floor Cutoff
- April 27, 2025: Last Day of Session
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