OLYMPIA—Washington state is projecting a $903 million decrease in Near General Fund revenue collections through 2029 from its June 2025 forecast, according to estimates released Tuesday by the Washington State Economic and Revenue Forecast Council (ERFC).
According to ERFC, “The changes in the forecast are primarily the result of a weaker taxable sales forecast for retail and construction, lower state agency revenues, and a reduction in projected real estate excise tax returns.”
“For some time, my budget team has been preparing for a challenging revenue forecast. Today’s forecast is disappointing but not surprising,” Governor Bob Ferguson (D) posted to X addressing the revised revenue forecast. “Unfortunately, we are also grappling with the impacts of President Trump’s Big Betrayal Bill, which includes billions in cuts to Washington state for programs such as Medicaid and food for hungry kids. Approximately 28% of our budget consists of federal investment, so these cuts will have adverse impacts for many Washingtonians.
Ferguson added that for his first proposed 2027-29 biennium budget, he will be focused on “delivering a balanced budget that maintains core services to the people of our state.”
Senate Ways & Means Chair June Robinson (D-Everett) stated that Washington’s economy is strained because of federal tariffs and policies.
“As the most trade-dependent state in the nation, we’re feeling the impact of the president’s tariffs, which are weakening our trade relationships and hurting farmers, small businesses, and manufacturers across the state,” Robinson released in a statement. “This threatens the revenue we rely on to fund essential state services like education and behavioral health.”
She added that the One Big Beautiful Bill is increasing costs for programs like SNAP and health care, complicating budget planning and that legislators are committed to protecting vulnerable residents and sustaining state progress despite budget challenges.
Representative Travis Couture (R-Allyn), the ranking Republican on the House Appropriations Committee, sees the root cause differently. In a statement posted to X, he accuses Democratic lawmakers of ignoring predictable economic slowdowns, doubling state spending in a decade, and creating an unsustainable budget despite record revenues and new taxes.
“The latest revenue forecast should be a wake-up call,” wrote Couture. “Slowing growth was predictable, but Democratic budget writers ignored the warnings and plowed ahead with record spending. Now the numbers confirm what we’ve been saying all along: that they have spent us into oblivion. The result is an unsustainable state budget that is wildly out of balance.”
He states that the $900 million revenue drop over the next four years, is likely to increase to a potential $2.5 billion deficit when factoring in litigation and state employee contracts, signaling a severe unsustainable fiscal imbalance.
“And the forecast doesn’t account for potentially larger gaps that could come from current litigation against the state’s new sales tax expansion, additional state employee contracts, and other variables that could add up to a more than $1.5 billion additional budget gap for an actual deficit potentially as high as $2.5 billion,” Couture wrote.
“Now, this latest forecast makes it clear Washington is in a precarious position,” added Couture. “Reckless spending and massive tax hikes have driven up the cost of living, pushed jobs out of state, and left us with almost no safety net. We warned them. They didn’t listen. Now the budget is bleeding red, and working families will pay the price. It’s time to get back to basics and fund the essentials, stop the gimmicks, and put our state back on solid ground.”
The ERFC forecast is comprised of revenue estimates for the current biennium (2025–27) which began July 1, 2025, and the next biennium (2027–29). It also includes a small adjustment for the 2023-25 biennium that ended on June 30.
Projected collections for the 2025–27 state budget are now $74.3 billion, down about $412 million since the June forecast. The forecast revenue for the 2027–29 biennium is around $79.5 billion, which is $477 million lower than projections in June.
“The September forecast continues to expect slower growth in the near-term reflecting a slowing national economy and leading to reduced Washington state revenues from what was expected in June,” said Dave Reich, forecast council executive director.
“Given the ongoing uncertainty in the economy and around federal funding, OFM continues to carefully monitor the state’s financial outlook,” said K.D. Chapman-See, director of the Office of Financial Management. “We’ve been preparing for the possibility of slowing revenue growth, and today’s forecast will inform our work as we help develop Governor Ferguson’s supplemental budget proposal.”
The transportation revenue forecast is expected on September 26 and the next forecast for Near General Fund revenue is scheduled for November 18, 2025.
Article updated at 1:21 p.m., September 24, 2025, to include a statement from Representative Travis Couture (R-Allyn).
Author: Mario Lotmore
