House Democrats pitch ‘balanced’ budget with new taxes on wealthiest to shield schools, food and health

House Democratic leaders on Tuesday unveiled a proposed Washington state budget and an accompanying revenue package they said is designed to “do the least amount of harm” while protecting food, shelter and health programs.

“Our approach has been simple: do the least amount of harm and protect food, shelter, and health as best we can,” said Chair Ormsby, who opened the press conference and introduced the budget team. The proposal will go into negotiations with the state Senate next week, officials said.

Why it matters: Officials said slowing revenue growth, persistent inflation and a population surge that increased demand for schools, housing and health care created a budget gap. Rather than closing that gap solely through cuts, House leaders proposed a mix of reductions, delayed program rollouts and new revenue targeted at the wealthiest households and the state’s largest businesses.

What’s in the revenue package: Finance Chair April Berg outlined three major elements: a Financial Intangible Assets tax, changes to the property tax revenue growth limit, and modest surcharges on the largest businesses and certain financial institutions. Berg described the intangible-assets levy as “$8 on every thousand dollars of estimated value” of covered assets with the first $50 million of assessed value exempt, saying the tax would be paid by roughly 4,300 wealthy Washingtonians and generate about $2 billion annually beginning in fiscal 2027.

Berg said the package also would allow jurisdictions to grow the revenue growth factor up to 3 percent (the constitutional 1 percent property-tax rate cap would remain unchanged) and would add a 1 percent business-and-occupation surcharge for firms with taxable income above $250 million. She said surcharges on certain financial institutions would rise from 1.2 percent to 1.9 percent. Berg and briefing materials estimated the surcharges would yield nearly $600 million in the first fiscal year and about $2 billion by fiscal 2027.

Protections and program priorities: Representatives Mia Gregersen and Nicole Macri detailed areas the House intends to protect, including school meals, special-education pilots, national-board teacher bonuses, and higher-education aid. Gregersen said the House would not raise tuition and would preserve the Washington College Grant and college-bound scholarship eligibility levels currently in law.

Macri said the plan preserves pandemic-level emergency food assistance by making a $93 million one-time increase permanent, maintains the Senior Nutrition Program that serves more than 13,000 seniors, continues summer EBT, and allocates $117 million to help local governments keep shelter beds online. Macri also said the budget includes $39.5 million to support new arrivals and keeps Cascade Care premium assistance for people up to 250 percent of the federal poverty level.

Cuts and delays: Officials said the package contains about $6.5 billion in reductions. Among the changes cited were a pause or delay in several policy phase‑ins: some Fair Start for Kids elements (ECAP as an entitlement pushed to 2031 and other eligibility increases delayed to 2029 and 2031), delaying a nursing‑home rate rebase from 2027 to 2028, and capping certain program enrollments. The House also proposed eliminating Medicaid coverage for acupuncture and chiropractic services and a one‑percent reduction in some Medicaid managed‑care rates. Officials said some planned behavioral‑health openings will be paused and cited closures of specific correctional and reentry facilities in the package.

Police funding and community reinvestment: When asked whether the package meets the governor’s request for $100 million to hire police officers, Majority Leader Joe Fitzgibbon said the House proposal includes $50 million over four years for criminal‑justice purposes and another $50 million over four years for a community reinvestment program aimed at upstream investments to reduce inequality and prevent crime.

Next steps: House leaders said they will begin negotiations with the Senate and work with the executive branch to finalize the budget. No formal votes were taken at the press conference.

—Majority Leader Joe Fitzgibbon, Finance Chair April Berg, Representative Mia Gregersen and Representative Nicole Macri spoke at the event. The House said the proposal will be reconciled with Senate priorities in the coming weeks.