City lobbyist briefs Issaquah council on 2026 session: budgets, SR-18 funding preserved, housing mandates adopted
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Summary
Issaquah's contract lobbyist reviewed the 2026 short legislative session, noting supplemental operating ($2.4B), transportation ($1.2B) and capital ($889M) budgets; highlighted that SR-18 first-phase funding was retained, flagged SB 6346's possible local revenue impacts, and summarized housing- and public-safety-related bills of interest to the city.
Shelly Helder, the City of Issaquah's contract lobbyist in Olympia, briefed council on outcomes from the 2026 legislative session and how several measures affect the city.
Helder said the short (60-day) session delivered three supplemental budgets: roughly $2.4 billion to the operating budget (including about $880 million from the Budget Stabilization Account), approximately $1.2 billion in the supplemental transportation budget focused on maintenance, and about $889 million in supplemental capital funds, which included an additional $123 million for the Housing Trust Fund. She said the state retained most shared revenues for cities despite some reductions (for example, roughly $5 million in cannabis-sharing revenues).
On local priorities, Helder reported the supplemental transportation budget preserved funding for the first phase of the State Route 18 widening and safety project, while the second phase remains unfunded. She also discussed city efforts on fiscal-sustainability legislation, including work on a House bill (recorded in the packet as House Bill 2393) that sought to limit civil liability for local correctional facilities but did not receive a hearing; the Office of Administrative Hearings will convene a committee to recommend liability-reduction approaches for the 2027 legislature.
Helder flagged Senate Bill 6346 (described in her presentation as a "millionaire's tax") that would institute a high-income tax and eliminate sales tax on select products, noting that language in the bill acknowledges reduced local sales-tax revenue and that a $200 million set-aside in the four-year outlook is intended to support local fiscal health but does not specify distribution among cities, counties, or transit agencies.
On housing, Helder said legislators adopted changes (House Bill 2266) requiring cities to allow permanent supportive and transitional housing in residential zones and to allow shelters where hotels are permitted; she described the measure as a mandate that incorporated city feedback but may leave implementation challenges for local governments.
Helder also summarized other matters the city tracked, including eCityGov permitting funding requests (a $2.7 million ask ultimately reduced to $1 million and not included in the final budget), and parallel bills on electric motorcycles and condominium-liability reform. She recommended continued engagement with the city delegation and suggested the administration and council consider an interim legislative breakfast to prepare for the 2027 session.
Management analyst Jillian Straub asked the council to authorize a legislative breakfast this spring to strengthen informal relationships with the delegation, review 2026 outcomes, and begin interim work to prepare priorities for the next biennium.
