Washington lawmakers warn of tight budget negotiations as operating and capital budgets advance

Speaker 1 said the Legislature is entering an “intense” period to reconcile the operating and capital budgets after the Senate passed two of three budgets and the House moved the operating budget off the floor. Lawmakers described a significant shortfall that will require decisions balancing services for public schools, health care programs and county services against limited revenue options.

Speaker 2 noted the operating budget was moved off the floor following a seven-hour debate and described the immediate next phase as aligning House and Senate budgets. Both speakers said early conversations with the governor are helping shape which revenue proposals are feasible before final floor action.

Reporters pressed whether the governor’s comments would narrow paths for resolving the gap; Speaker 1 said the governor’s remarks will clarify his preferred approach. Lawmakers repeatedly emphasized contingency planning, saying they have “plans B, C and D” to limit harm if revenues fall short or if federal actions disrupt funding.

On revenue choices, speakers pointed to limited tools — property tax, sales tax and B&O/payroll taxes — and cited recent ballot measures as signals of voter preferences for some revenue sources, including support for capital gains measures and investments tied to the Climate Commitment Act. Speaker 6 urged local governments to address housing affordability, calling housing “one of the most significant cost drivers” behind workforce compensation pressures.

Lawmakers described coordinated work across chambers and with the governor to produce a package the governor will support, while continuing to prepare contingencies in the event of vetoes or sudden federal funding changes. The session’s next procedural deadlines were cited as compressing time available for negotiation.