OLYMPIA – Washington state’s projected state revenue through 2029 has decreased by roughly $66 million from the September 2025 forecast, according to a report by the Washington State Economic and Revenue Forecast Council.
The decline is attributed to lower projections for housing permits and employment, although an increase in state payments from the Tobacco Master Settlement Agreement provides some offset, the council reported.
Projected revenue for the 2025–27 biennium is now $74.5 billion, up about $105 million since September, but still $390 million lower than when the budget was enacted in May. For the 2027–29 biennium, revenue is forecasted at $79.4 billion, $185 million below September’s projections.
Dave Reich, the council’s executive director, noted the broader economic uncertainty. “The November economic forecast reflects fewer housing permits, lower employment and slower personal income growth leading to lower forecasts for many revenues,” he said.
Sen. Chris Gildon, Senate Republican budget leader, emphasized the stakes following the adoption of the forecast by the council.
“Although this forecast doesn’t make the anticipated shortfall a whole lot deeper, there is no denying Olympia would be in a very different situation had the new state budget simply stayed within the available revenue,” Gildon said.
Gildon expressed concern over potential responses from the state’s Democratic majority, particularly regarding tax policies.
“We already expect those in the Zohran Mamdani wing of the state’s Democrat majority will use this shortfall to justify their latest approach to a state income tax,” he said.
The governor’s budget proposal is anticipated in mid- to late-December, with legislative sessions beginning January 12.
