On Monday, Feb. 16, the Washington State Economic & Revenue Forecast Council released the聽, which will be the last before the end of the 2026 legislative session. As a reminder, this revenue forecast will influence the state’s budget decisions as the House and Senate plan to release their operating and capital budget proposals next week and pass a reconciled budget bill before session adjournment in March.
The February forecast projects a modest revenue increase through 2029. Compared to the last quarterly forecast in November 2025, revenue is expected to grow by $827 million for the current 2025-27 biennium and $1.03 billion for 2027-29. This translates to聽an additional $438 million聽that the Legislature can appropriate during this legislative session.
For the Workforce Education Investment Account (WEIA), which is a fund that the Legislature established in 2019 specifically to support higher education, revenue is forecasted to increase by聽$172 million in the current biennium and by $249 million for the 2027-29 biennium.
More details about the forecast can be found here:聽.
While positive news, the projected increase in revenue does not fully solve the state’s $1.6 billion operating budget shortfall this year. State agency budget cuts remain likely to help solve the deficit.聽Additionally, the Legislature doesn’t have much of an appetite for significant new revenue since the state passed a slew of revenue bills last session.
However, the one major new revenue proposal in play is a state income tax on high earners, known as the 鈥渕illionaire鈥檚 tax.鈥� The policy imposes a 9.9% tax on earnings of more than $1 million per year. It would take effect on Jan. 1, 2028, with first payments due in April 2029, so the proposal does not help solve the near-term budget deficit.聽The Senate passed the policy on Monday largely along party lines,聽so it will now move to the House for consideration.
Governor Ferguson held a press conference on Tuesday, Feb. 17, on the proposal. While he supports the concept of a millionaire’s tax and believes the Senate proposal is a good start, he wants more than half of the revenue directed to Washington families by expanding and increasing the Working Families Tax Credit and small businesses by boosting the small business tax credit.
For questions about specific policy proposals or UW鈥檚 advocacy efforts in Olympia, please contact Morgan Hickel at聽mhickel@uw.edu聽and Kevin Chang at聽kchang28@uw.edu.