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Lawmakers warn of thin reserves and urge ‘do no harm’ as Washington faces budget squeeze
Summary
State lawmakers on a TVW panel in Spokane described a precarious budget picture — near‑zero ending reserves, growing tort and entitlement costs, and federal funding uncertainty — and debated whether to prioritize spending cuts, program evaluation, targeted tax relief or structural tax reform.
TVW’s Rachel LaCourte convened lawmakers in Spokane to discuss Washington’s budget outlook, saying recent forecasts show tax collections down by hundreds of millions and elevated risk from trade and federal spending uncertainty.
Sen. Chris Gildan, the Senate Republican ranking member on the Ways and Means Committee, framed the central problem as a spending issue and warned the state’s cushion is effectively gone. "The latest economic forecast ... showed that our state had an ending balance of $2,000,000," Gildan said, adding that such a small balance left "37¢ in the bank" for a family of four as an analogy. He urged lawmakers to "do no harm" on taxes and to focus on ensuring each dollar delivers measurable results.
Democratic Sen. Marcus Richeli said he expects a "manageable" but challenging session and flagged health‑care risks tied to federal policy as a top concern for his district’s poorest census tracts. "It's hard to look in the crystal ball with a lot of national uncertainty," Richeli said, urging engagement with Department of Revenue measures and longer‑term thinking about the two‑ and four‑year outlooks.
Rep. April Berg, chair of the House Finance Committee, emphasized that entitlement programs and rising per‑unit costs — not just caseload counts — are driving spending pressures. She noted recent state actions to cut about $8 billion and said policymakers must balance affordability while protecting essential services: "As policymakers, that's what we're gonna have to look at next session — how we bake in uncertainty into tax policy while still taking care of people," Berg said.
Panelists pointed to several concrete budget risks and possible remedies discussed during the session. Speakers cited a four‑year outlook that has shifted from balance to a roughly $300 million projected deficit, referenced the June forecast and noted a lawsuit that could imperil about $475 million in sales‑tax revenue on advertising services over four years. Lawmakers also raised growing tort liability costs; one panelist said tort payments were about $500 million this year and likely to rise.
Ideas offered to address the squeeze included expanding program evaluation and adopting "dynamic fiscal notes" to show how tax preferences function as spending, auditing overlap such as concurrent Medicaid enrollments (which can create double payments), targeting tax incentives to industries harmed by tariffs, and pursuing regulatory relief to reduce business costs.
Gildan and other Republicans repeatedly urged restraint on new taxes. "If you're concerned about tariffs ... the first thing you should do is do no harm with the things that you can control here in Washington state," Gildan said. Democrats on the panel said they were actively discussing business‑tax regressivity and pointed to a bipartisan tax‑structure work group that advanced a margins/franchise concept as one potential path to a broader, lower‑rate base.
Panelists also discussed how the supplemental session will differ from past short sessions: lawmakers said a deficit during the supplemental is possible, not the surplus they have often seen before, and that the state's lack of an income tax limits the tools available. Several legislators stressed that education remains the state's "paramount duty," warning that the supplemental will not allow large new investments but that maintaining school operations and wraparound supports will be a priority.
Audience members pressed panelists on education priorities and the impact of tariffs on small businesses that rely on low‑cost imports and drop‑shipping. Rep. Berg and others singled out uncertainty as the immediate harm for many small sellers and families, saying that uncertainty — more than a single policy change — is depressing spending and revenue.
The panel closed with lawmakers urging a mix of vigilance, program audits, and targeted relief for industries most affected by outside shocks, while differing on whether additional tax changes are warranted. Rachel LaCourte wrapped the session after the panel’s allotted time expired.
