Legislators keeping busy in interim

By Diana Carlen
Lobbyist, Washington Association of Wheat Growers

The 2025 Washington State Legislative Session may have wrapped up in April, but the work in Olympia continues. Interim activities are already shaping the policy and budget debates for the 2026 legislative session. The interim is busy filled with work groups, agency rulemaking, interim legislative committee meetings, and agency budget and legislative proposals.

Here’s what we are watching between now and the start of the 2026 session which begins on Jan. 12. 2026.

Primary Elections

Aug. 5 marks Washington’s primary election day. Although typically there would be no state legislators up for re-election this year, there are a number of legislative races up for election due to vacancies and appointments which have triggered special elections. Voters in six legislative districts will select their top two candidates to go onto the general election in November. Below are the key legislative races to watch this year.

  • 5th Legislative District: The late Sen. Bill Ramos passed away just days before the conclusion of the 2025 session. As a result, current Rep. Victoria Hunt (D) who won election to the House in 2024 is running to fill the vacant Senate seat. Hunt will face former Rep. Chad Magendanz (R).
  • 26th Legislative District: At the end of 2025, Democrat Party officials appointed Sen. Deb Krishnadasan (D) to fill the seat previously held by now-Congresswoman Emily Randall. Current Rep. Michelle Caldier (R) is running against Krishnadasan in November. No other candidates have filed in this race.
  • 33rd Legislative District: Sen. Tina Orwall (D) was appointed to replace Karen Keiser, who retired at the end of last year. Sen. Orwall appears to be running unopposed. Appointed to fill Orwall’s vacant House seat, Rep. Edwin Obras is challenged by two candidates: Republican Darryl Jones and Democrat Kevin Schilling.
  • 48th Legislative District: Former Sen. Patty Kuderer won her election to serve as the state’s Insurance Commissioner last November. Rep. Vandana Slatter (D) was appointed to fill the vacant Senate seat. Rep. Amy Walen (D) is challenging Slatter for the seat. Rep. Walen is generally supported by the business community as the moderate in the race.

Budget Prep and Revenue Forecasts

In June, budget writers received grim news with the latest revenue forecast showing revenues down $720 million over the next four years. When the legislature adjourned in April, the state operating budget had an ending fund balance of just $80 million, or 0.1% of the $77.9 billion in spending. Nonpartisan staff have updated the state’s budget outlook and projected the state budget will have an ending fund balance for the 2025-27 budget of only $2 million, and a projected shortfall of $331 million in the 2027-29 budget cycle, although those numbers could change depending on the demand for core state services.

This is distressing news as the budget only went into effect on July 1 after a contentious session where the Democrat-controlled legislature plugged a $16 billion state budget shortfall by passing the largest tax increases in state history. The governor and legislative leadership were not surprised by the revenue forecast and have indicated that they do not think the news calls for a special session yet. The governor has requested agencies to propose further cuts to their budgets in response to this news.

Budget planning for the upcoming session is already underway. State agencies must submit their decision packages to the Governor’s Office, outlining proposed budget changes by Sept. 15. Budget writers will get updated revenue forecasts in both September and November, which will help shape the baseline for the release of Gov. Ferguson’s first budget rollout in mid-December.

New Sales Tax Law Raising Challenges

As part of plugging the budget hole in April, the state legislature passed ESSB 5814, which imposed sales tax on multiple services. This means sellers must begin collecting sales tax on these services starting on Oct. 1, 2025:

  • Information technology services.
  • Custom website development services.
  • Investigation, security, and armored car services.
  • Temporary staffing services.
  • Advertising services.
  • Live presentations.
  • Sales of custom software and customization of prewritten software.
  • Modification of digital automated services (DAS) exclusions.

Because the legislation was introduced with only 10 days left of session, there are many questions about how this legislation will be implemented. The Washington State Department of Revenue (DOR) is finalizing guidance that will be released in September on how it interprets the new law and has been holding listening sessions to get feedback.

For WAWG, we have been focused specifically on application of the new law regarding temporary services, advertising services and live presentations, such as conventions. WAWG staff has participated in the listening sessions for these three topics. WAWG has also joined other agricultural groups in sending a letter to DOR arguing that farm labor contractors and common paymasters does not meet the definition of “temporary staffing services” and thus should not be subject to the tax. If DOR were to include that in the definition, it would dramatically increase labor costs for farms under economic stress.

WAWG will keep their members up to date on guidance issued by DOR before the new law goes into effect in October.

DOR has set up a website with more information about implementation of this tax: Services newly subject to retail sales tax | Washington Department of Revenue

Wheat, Potato, and Shellfish Hosting a State Legislative Tour

Wheat, potato, and shellfish growers will host an agricultural tour in Skagit County for state legislators and agency staff at the end of the month. The immersive, two-day event will celebrate the region’s agricultural heritage, innovation, and environmental stewardship. The program will open Tuesday evening, Aug. 26, with a welcome reception at Christianson’s School House, set among the historic glasshouses and gardens of Christianson’s Nursery & Greenhouse in Mount Vernon. Washington State Department of Agriculture Director Derek Sandison will be on stage to deliver the keynote address, underscoring the importance of local agriculture in sustaining rural economies and global food trade. The second day will be a full day touring various sites, including a tour of Cairnspring Mills in Burlington.