Legislative Report

By Boswell Consulting

The legislature has now passed the half-way point of the 105-day session. As we approach the March 12 house of origin cutoff, some bills will not advance due to the high volume of proposed legislation and the session’s tight timeline.

There are only four more weeks left in the 105-day legislative session. Last week, hearings and executive sessions on bills continued in advance of the April 2 opposite-house policy cutoff.  Legislators  have also shifted  to focus on the budget, as the Senate and House released and held hearings on their 2025-27 Operating and Transportation Budget Proposals.

This week the House and Senate will release Capital Budget Proposals, which outline the state’s infrastructure spending over the next two years within Washington’s constitutional debt limit. Ultimately, the House and Senate need to come together to reconcile differences and pass the final budgets and any associated new revenue by April 27.

Budget and Revenue Update

On March 24, the Senate released its 2025-2027 Operating Budget Proposal. The Senate’s proposal looks to spend $78.5 billion over the next two years. This includes a $6.5 billion spending increase in the 2025-27 biennium. The bulk of the spending in the Senate is going toward K-12 education, the Department of Children, Youth and Families, and the Department of Social and Health Services.

The House also released its 2025-27 Operating Budget Proposal, which includes $77.8 billion in total budgeted funds and a net increase of $4.4 billion in the 2025-27 biennium. The House proposal is slightly more conservative and most notably increases special education funding by only $482 million over the next four years whereas the Senate’s proposal increases special education spending by $2 billion. Both proposals assume new revenue from their respective tax proposals. More information is included in this recent KING 5 story. The Senate passed its proposal on Saturday, and the House was expected to do the same on March 31.

The House and Senate also released 2025-27 Transportation Budget Proposals. The Senate released two bipartisan budget proposals, which address a $1 billion shortfall. The first would be supported by existing revenues and would cut $941 million from the capital project budget and $156 million from state agency operating costs. The second would generate $10.2 billion in new revenue over six years. The House released a single bipartisan proposal that falls somewhere in between the two Senate proposals in terms of spending. Both the House and Senate revenue proposals include an increase in gas taxes that increase over time. The Senate proposal includes an increase in 6 cents per gallon, set to increase by 2% every year through 2031. The House proposal includes an increase of 9 cents per gallon,indexed to inflation to grow by about 3% annually.

Please see below for key insights from week 11:

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. The bill is scheduled for a hearing in the House Appropriations Committee at 1:30 p.m. on April 4.

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. House Bill 1213 was heard in the Senate Labor & Commerce Committee on March 24, and executive action was taken in the same committee on March 28.

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. The bill is scheduled for a hearing in the House Finance Committee at 8:00 a.m. on April 3.

Senate Bill 5796 establishes a payroll expense tax on large employers to fund public services. 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 is scheduled for a hearing in the Senate Ways & Means Committee at 4:00 p.m. on March 31.

House Bill 2045 proposes changes to Washington state’s B&O tax structure by introducing a 1% surcharge on taxable income exceeding $250 million for high-grossing businesses and increasing the existing surcharge on large financial institutions from 1.2% to 1.9%. The bill aims to generate additional revenue to fund K-12 education, public safety, health care, and other human services. The bill is scheduled for a hearing in the House Finance Committee at 8:00 a.m. on April 3.

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. The bill is scheduled for a hearing in the Senate Ways & Means Committee at 4:00 p.m. on .

Senate Bill 5791 increases 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 has yet to be scheduled for a hearing in the Senate Ways & Means Committee.

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. The bill is scheduled for a hearing in the Senate Ways & Means Committee at 4:00 p.m. on March 31.

House Bill 2038 and Senate Bill 5799 impose a new 0.4% business and occupation tax on social media platforms to fund youth behavioral health initiatives. Revenue from the tax will be deposited into a dedicated account to support behavioral health programs for individuals prenatal through age 25, including telecommunications or videoconferencing  health services and multisystem care coordination. The bill takes effect on Jan. 1, 2026. A public hearing in the House Finance Committee or Senate Ways & Means Committee has yet to be scheduled.

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 was voted out of the Senate Housing Committee on March 26 with a majority recommending “do pass with amendments.” It is scheduled for a hearing in the Senate Ways & Means Committee at 1:30 p.m. on April 4.

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 action was taken in the Senate Committee on Housing on March 26, where the majority recommended a “do pass” with amendments, while the minority issued a recommendation “without recommendation.” The bill is scheduled for a hearing in the Senate Ways & Means Committee at 1:30 p.m. on April 4.

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. The bill is scheduled for an executive session in the Senate Ways & Means Committee at 1:30 p.m. on April 3.

Economic Development

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 had a public hearing in the Senate Labor & Commerce Committee on March 25 and is scheduled for executive session at 10:30 a.m. on March 31.

Senate Bill 5677 increases funding for associate development organizations and standardizes performance reporting requirements statewide. It is scheduled for a public hearing in the House Appropriations Committee at 1:30 p.m. on April 3.

Important Session Dates

  • April 2, 2025: Opposite House Policy Cutoff
  • April 8, 2025: Opposite House Fiscal Cutoff
  • April 16, 2025: Opposite House Floor Cutoff
  • April 27, 2025: Last Day of Session

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