The 60-day 2026 legislative session officially adjourned on Thursday, March 12 at 8:26 p.m. During the last week of the session, the legislature focused on reconciling differences on bills passed by the House and Senate, passing the new “millionaire’s tax”, and passing the final 2026 supplemental operating, capital and transportation budgets.  267 bills passed the legislature and are on their way to the Governor’s desk to be signed into law. The Governor has the option to veto an entire bill, or veto a specific section or appropriation within a bill. However, the Governor may not veto a single word or sentence within a section of a bill. To see a full list of bills that have already passed the legislature and been signed by the Governor, click here. This is the end of the biennium so any bill that did not pass will need to be reintroduced as a new bill in 2027.

One of the most notable moments this legislative session was the Washington State House’s marathon floor debate on the proposed “Millionaire’s Tax,” SB 6346. The debate started on Monday March 9th around 6pm and stretched for more than 24 consecutive hours, one of the longest floor debates in Washington State’s history. In total, 79 amendments were offered, largely by Republicans as part of a strategy to slow the bill’s advancement and force debate on various tax policy issues. After the lengthy debate concluded, the House passed the bill on a narrow 51–46 vote. Eight Democrats — Reps. Bronoske, Morgan, Reeves, Richards, Rule, Shavers, Timmons, and Walen — joined Republicans in opposing the measure, underscoring the political sensitivity of creating a new state income tax even within the majority caucus. The Senate concurred with the changes made to the bill in the House, and the Governor is expected to sign the bill. You can read more about the debate and the policy here. It is widely expected to face immediate legal challenges once signed into law. Opponents argue the measure violates long-standing Washington Supreme Court precedent treating income as property, meaning it must be taxed uniformly under the state constitution, setting up a likely court battle that could ultimately be decided by the Washington Supreme Court. It is unclear if there may also be initiatives to undo this new tax. Should the tax be upheld and enacted, it would go into effect in 2028, and the first tax payments would be collected in 2029.

The 2026 supplemental operating, capital and transportation budgets were released on March 11. The capital budget was negotiated informally, and both the Transportation and operating budgets were negotiated through conference committees (a process where designated members from each chamber are selected to come together and negotiate final agreements). The proposed 2026 Supplemental Capital Budget appropriates $889.7 million, including $435.1 million in bonds and $454.6 million from other state and federal sources. A significant portion of this budget relies on $839.9 million from Climate Commitment Act (CCA) funds, which are used both for new investments—such as clean energy, building decarbonization, and salmon recovery—and to refinance previously bond-funded projects, freeing up other revenue sources to support the supplemental operating budget.

The 2026 Supplemental Transportation Budget totals $16.6 billion in appropriations, including $10.2 billion for capital projects and $6.4 billion for operating programs, representing a $1.2 billion increase over the 2025 enacted budget. The conference agreement prioritizes preservation and maintenance of existing transportation infrastructure, committing more than $1.5 billion in new preservation and maintenance investments through the 2029-31 biennium, supported in part by an $800 million bond authorization. Key investments include increased funding for highway preservation and maintenance, Washington State Ferries preservation, hybrid-electric vessel procurement, and terminal electrification, along with targeted funding for flood recovery, traffic safety initiatives, and transit and mobility grants. The budget maintains a six-year planning horizon through 2029-31 to support long-term project delivery and infrastructure planning, while also advancing studies and policy initiatives focused on transportation system sustainability, safety improvements, and emerging technologies.

The 2026 Supplemental Operating Budget increases spending in the 2025–27 biennium to $80.2 billion Near General Fund–Outlook (NGF-O) and $157.3 billion in total budgeted funds, reflecting adjustments to maintain existing programs and address rising service costs. The budget includes $1.7 billion in NGF-O maintenance level increases to sustain current obligations—primarily driven by higher costs in Medicaid medical assistance, Working Connections Child Care, and long-term care services—as well as $621 million in net policy-level NGF-O investments. The agreement relies on several balance sheet actions, including an $880 million transfer from the Budget Stabilization Account (rainy day fund), assumed agency savings and reversions, and updated revenue projections. Following these adjustments, the budget is projected to end the 2025–27 biennium with a $231 million NGF-O ending balance and $1.3 billion in total reserves, while maintaining compliance with the state’s four-year balanced budget requirement. Looking ahead, the outlook assumes additional revenue in future years, including new legislation such as the “millionaire’s tax” (ESSB 6346), will significantly increase resources in the 2027–29 biennium.

As we head into the interim, this is a major election year with the entire 98 seats in the House of Representatives up for election and half of the 49 members of the Senate; 25 seats are up for election. Many legislators have announced their retirement or plan to run for different offices. While there will likely be many more in the coming weeks, below is a list of members who have announced their departure from their current roles:

  • House: Michelle Valdez (R-26), Steve Tharinger (D-24), Jenny Graham (R-6), Sharon Wylie (D-49), Timm Ormsby (D-3); Chipalo Street (D-37) is running for the Senate, Sharlett Mena (D-29) is running for Senate
  • Senate: Judy Warnick (R-14), Rebecca Saldana (D-37), Steve Conway (D-29), , Sharon Shewmake (D-42); Matt Boehnke (R-8) is running for the House of Representatives in Congressional District 4.

The 105-day 2027 legislative session will begin on the second Monday in January.  To reiterate, the legislature works on a two-year biennium, so next year is the beginning of a new biennium.

HB 2100 and SB 6093 would each establish a new 5 percent payroll excise tax on large operating companies’ payroll above the federal additional Medicare tax threshold (effectively $125,000 per employee), with revenues split between the state general fund and a new Well Washington Fund to backfill anticipated federal cuts to health care, higher education, food assistance, energy, and related services. HB 2100 had a public hearing in the House Finance Committee on January 22nd. Seattle Metro Chamber’s CEO Joe Nguyen testified in opposition to the bill along with our partners from the Washington Roundtable, AWB and the Bellevue Chamber. The bill ultimately never advanced out of Committee.

SB 6026 requires cities and non-rural counties planning under the Growth Management Act (GMA) with populations over 30,000 to allow residential development in most commercial and mixed-use zones, while limiting local requirements for mixed-use or ground-floor commercial space. As adopted by the Legislature, the bill allows jurisdictions to require mixed-use or ground-floor commercial uses in up to 40% of eligible commercial and mixed-use areas, with exemptions for publicly subsidized affordable housing and provisions allowing developers to seek waivers or reductions of those requirements. The bill also provides an 18-month compliance window for jurisdictions to update their local development regulations. SB 6026 passed the Senate on March 10 on a 35–14 vote after the Senate concurred with House amendments and is now headed to the Governor’s desk to be signed into law

HB 2325 creates a self supported, industry funded statewide tourism assessment program administered by the Washington Tourism Marketing Authority, allowing tourism related businesses in specified sectors to finance coordinated marketing, promotion, and destination management through an industry designed, referendum ratified assessment overseen by a ratepayer oversight board with protected proprietary data. House Bill 2325 then passed the Senate on March 10 by a vote of 43-5.

HB 2515 would have required utilities to develop specialized tariffs to ensure large data centers fully cover the costs associated with infrastructure, transmission, clean energy compliance, and Climate Commitment Act obligations. The bill generated significant debate among industry, labor, and environmental stakeholders but ultimately did not advance this session. Despite its failure in this session, the policy concerns surrounding data center energy use and cost allocation remain active, and we expect the issue to resurface in future legislative discussions.

SB 6231 seeks to remove a key tax preference that data centers receive on replacement equipment. The bill specifically repeals the retail sales and use tax exemption for replacement server equipment and refurbishment of existing data centers, meaning companies upgrading hardware would no longer qualify for the exemption beginning July 1, 2026. The bill passed both chambers and now sits on the Governor’s desk awaiting final action.

GF-S $500,000 (2027) one-time disbursement of funds solely for a contract with a statewide organization with a mission of developing new and innovative ways to combat organized retail crime and to implement a program to respond to organized retail crime, with a focus on diversion-oriented programs.