Washington State Faces Budget Shortfall Despite New Income Tax Projections
Washington State is confronting a persistent budget shortfall for the third consecutive year, as recent tax receipt forecasts indicate flat revenue. The latest forecast, released on Friday, shows only a modest increase of $22 million for the current budget ending June 30, 2027, and $430 million for the subsequent 2027-29 biennial spending cycle, compared to June estimates. This is insufficient to cover a several hundred-million-dollar deficit in the 2028 fiscal year and a projected multi-billion-dollar shortfall in the next budget. K.D. Chapman-See, director of the Office of Financial Management, noted that the forecast makes the budget picture slightly worse for next year. However, a potential silver lining comes from the state's new 9.9% income tax on individual and household wage income above $1 million, signed into law by Governor Bob Ferguson in March. This tax, slated to take effect on January 1, 2028, is now projected to generate significantly more revenue than initially anticipated, with Chief Econ...