Gov. Bob Ferguson, speaks to reporters during a press conference on Jan. 9, 2025 in Olympia. (Bill Lucia/Washington State Standard)
Washington Gov. Bob Ferguson unveiled a plan for about $4 billion in budget cuts Thursday as officials look for fixes to a state balance sheet that is billions of dollars in the red.
This scrub is Ferguson’s first step in addressing an operating budget deficit projected to be around $12 billion over the next four years. Ferguson pegged that number higher — at $15 billion — on Thursday. The state’s two-year operating budget is now around $70 billion.
The governor’s proposed cuts would be on top of about $3 billion in savings and delayed spending in the final budget plan former Gov. Jay Inslee released in December.
Ferguson outlined his blueprint in a press conference Thursday morning. To what degree state lawmakers will embrace his proposals remains to be seen.
Even after factoring in the savings Ferguson identified and Inslee’s reductions, the state could face a gap of around $6 billion to $9 billion. Lead Democrats in the Legislature have already indicated that they believe taxes will be necessary to solve the deficit.
Public education and public safety agencies, like the Department of Corrections and Washington State Patrol, are immune from Ferguson’s cuts, according to the governor’s office. He also said investments in homelessness and housing assistance would be maintained.
And he said he planned to honor pay hikes in collective bargaining agreements with the state’s public employees.
Meanwhile, the cuts slice across a wide range of agencies.
They include $90 million from temporarily closing unused wards at Western State Hospital in Lakewood, $4 million from closing a unit at the Special Commitment Center on McNeil Island for people convicted of sex offenses and another $4 million from ending a lease on an unused state Department of Health warehouse.
He is also calling for cutting spending 50% on out-of-state travel, 25% on in-state travel and 10% on agency equipment and other purchases. In December, Inslee directed state agencies to freeze “most non-discretionary and non-essential” hiring, service contracts, purchasing and travel.
The Democratic governor has called further taxes to balance the budget a last resort, and he has been especially dubious of the so-called wealth tax his predecessor recommended. Democrats in the Legislature have been much more open to new taxes.
In the opening two months of the legislative session, Democrats have floated a variety of tax proposals, including taxes on cigarettes, storage units and gun and ammunition sales.
Lawmakers will also surely discuss the wealth tax on bonds and stocks. A version Inslee proposed — a 1% tax on an individual’s wealth above $100 million — could generate about $10 billion in the next four years.
A payroll tax on big businesses is another option Democrats have floated.
Meanwhile, some Republicans have argued the deficit is closer to $6 billion or $7 billion. They blame Democrats’ spending for the state’s financial woes and say new taxes or tax hikes are unnecessary.
“It’s really just a masquerade of their reckless spending and financial irresponsibility,” state Rep. Chris Corry, R-Yakima, told reporters Tuesday. “There’s no other way to put it. We’ve been warning them for years that you cannot continue to spend more money than you take in.”
Republicans have applauded the governor’s efforts to find savings.
At the dawn of his administration, Ferguson asked most agencies to find 6% budget cuts in a scramble for $4 billion in savings. He requested 3% cuts from four-year universities. Agencies had to submit these proposals by Feb. 6.
Last week, he canceled a trip to a National Governors Association meeting in Washington D.C. to focus on the budget.
Senate Majority Leader Jamie Pedersen, D-Seattle, said legislative Democrats have, separate from the governor, been going through the budget line-by-line for three months.
“I think we’re about at the point where those tracks converge,” House Majority Leader Joe Fitzgibbon, D-Seattle, told reporters Tuesday.
This is a developing story.