City staff preview 2025 state legislative session: budget shortfalls, transport funding and housing bills to watch

Katie Kasumba Halsey, assistant director for intergovernmental relations, briefed the Bellevue City Council on priorities and risks for the 2025 Washington State Legislature, emphasizing large budget shortfalls and a crowded bill load.

Halsey said the operating budget faces an approximately $10–$12 billion shortfall over the next four years and that the transportation budget is short roughly $200 million in the coming biennium and faces a roughly $6 billion gap over six years. "There were 500 bills that were dropped before session even started," she said, and staff are monitoring 90 of those potential measures.

Council members raised concerns about specific proposals. Councilmember Newenhouse focused on pending rent‑stabilization legislation, referring to it as "House Bill 1217, the rent stabilization bill," and warned it could reduce housing construction incentives. Other members asked about alternative transportation revenue ideas, including road usage charges and retail delivery fees, and stressed the importance of examining fiscal notes and unfunded mandates.

Why this matters: Halsey said the city will press for funding for local priorities — transportation projects on I‑405, the Grand Connection capital request and support for affordable housing — while watching proposals that could impose new local costs or change local planning obligations. She noted the incoming governor's differing budget priorities and said the March 20 revenue forecast will be a key pivot point for the session.

Council direction: Staff said they will continue outreach with state legislators, regional partners and the Association of Washington Cities and provide regular updates. Councilmembers asked staff to track impacts to small businesses, equitable revenue designs and unfunded mandates the city might have to absorb.