Senate Republicans unveil 'third way' budget for Washington that avoids new taxes

Sen. Chris Gildan, flanked by Sen. John Brown, released a Senate Republican "third way" operating budget proposal on the 58th day of the legislative session, pitching an alternative that uses existing reserves and reprioritized accounts to close a roughly $6.6 billion four-year shortfall without new taxes.

Gildan said the caucus sought a middle ground between Gov. Jay Inslee’s tax-heavy proposal and a deep-cut austerity plan, arguing the state could preserve core services while limiting growth to about 5 percent, protecting the rainy day fund and using forecasted revenue rather than the maximum allowable forecast. "The real budget shortfall is $6,700,000,000," Gildan said during the presentation, later noting a staff update revised that to $6,600,000,000.

The proposal includes roughly $2 billion in added K‑12 funding compared with the prior budget, with $200 million earmarked for material and operating costs and $200 million for special education; Gildan also said the plan preserves national-board teacher bonuses that the Inslee proposal would have reduced. For higher education, the budget adds about 1,800 undergraduate slots and, Gildan said, holds tuition steady.

On social services, Gildan said the plan avoids cuts to hours or eligibility for seniors and people with disabilities but achieves savings by freezing some rate increases and foregoing certain laid‑away policy expansions. For childcare, he said the caucus would not increase subsidy rates this year but would seek to lower regulatory burdens that raise providers’ costs.

Health‑care and program delivery changes include a move "from a managed care model to a fee for service model for certain services," Gildan said, describing a shift to paying for services delivered rather than paying a monthly premium regardless of use. He also said the budget would stop paying Medicaid premiums for people who do not live in Washington and would enforce existing work/participation requirements more strictly.

On workforce costs, Gildan cited collective bargaining agreements negotiated near the end of the prior administration totaling about $4 billion in raises. Rather than fund that full amount, the Republican proposal offers $5,000 one‑time bonuses to every state employee, saying workers earning $80,000 or less would come out ahead under the caucus plan.

To help close the gap, Gildan proposed using roughly $2.5 billion of a pension‑plan surplus that he said was idle and not currently committed to annuity payments. He also described moving the Working Families Tax Credit into the operating-budget share of the Climate Commitment Act (CCA) account — a reallocation he said has precedent in prior uses of CCA funds — and pledged $100 million in ongoing funding to hire additional law-enforcement officers in line with Gov. Jay Inslee's (sic) request to bolster public safety. Gildan also proposed "right sizing" DCYF by reducing some middle-management positions and shifting resources into frontline workers.

During a question-and-answer session, reporters pushed on the plan's assumptions. Gildan acknowledged the revenue forecast due next week could make the proposal stronger or weaker and said the caucus had briefed the governor's office and legislative leaders. To a question about why his $6.6 billion figure differs from other estimates in the $12–15 billion range, Gildan explained that adding the $4 billion in raises and roughly $1.7 billion in layaway-policy costs brings the total toward the higher estimate. He also said the legislature can approve or disapprove collective bargaining agreements and described the caucus' approach as a compromise that would allow further negotiation with the governor's administration.

Reporters also asked for specifics about the CCA reallocation and what share of CCA operating dollars would be redirected; Gildan said staff could provide that percentage and would follow up. On whether using pension surplus is merely shifting a raid from the rainy day fund to another fund, Gildan acknowledged the similarity but said Democrats would otherwise apply those dollars to new policy rather than deficit reduction.

Gildan closed by saying he wanted the proposal in the public domain for scrutiny: "We want you to do the numbers, check our math," he said, and invited reporters and the public to review the plan.

What happens next: the caucus said it released the proposal about two weeks before other budget releases to invite public scrutiny and feedback; the proposal's standing and specific allocations will depend on the revenue forecast and subsequent negotiations in the legislature.