Week 15, Washington State Legislative Report

By Diana Carlen
Lobbyist, Washington Association of Wheat Growers

The Legislature adjourned on the 105th day of the 2025 Legislative Session on April 27 at 6:30 p.m. In the final week of the legislative session, the Legislature adopted the 2025-2027 operating, capital, and transportation budgets. However, it is unknown if Gov. Ferguson will sign the operating budget, veto it, or partially veto it.

The main focus of the session was how to respond to the budget shortfall. Originally, democrat budget writers had proposed $21 billion in new taxes over four years, but the governor was critical of relying on a wealth tax and the large amount of taxes proposed. Democrat budget writers went back to the drawing board and proposed $12 billion in new taxes over four years, but again, the governor said that was too high. The final operating budget passed by the Legislature on the final days of the session landed on almost $9 billion in new revenue. The governor has not publicly stated whether he supports the final budget.

The Legislature also spent the final week passing bills. In total, the Legislature passed over 400 bills during the long session. A final report summarizing all major legislation impacting farmers will be posted at wawg.org.

Once a bill passes the Legislature, it is delivered to the governor to be signed into law, vetoed, or partially vetoed (he has the authority to remove entire sections of a bill, but not specific sentences). The governor has five days, excluding Sundays, to act on bills, unless the Legislature is within five days of adjournment, in which case the governor has 20 days to act. He has until May 20 to act on the budgets.

Final Operating Budget:

Senate and House democrat budget writers unveiled their final operating budget on the second-to-last day of session. The final budget raises taxes by about $9 billion over the next four years while also reducing spending to address the $16 billion budget shortfall. The final operating budget appropriates nearly $78 billion in spending for the 2025-2027 biennium, almost $6 billion higher than the current two-year budget. This is an 8.2% increase in spending from the previous biennium.

The final budget does not include some previous tax proposals that had been floated earlier, including a payroll tax on businesses with payroll expenses of $7 million on more. It also does not include a full-blown wealth tax, but Democrats proposed a slimmed down version to test its legality in the courts. The final budget funds pay raises for state employees, but does not include furloughs for state employees as Gov. Ferguson and the Senate had previously proposed. The final budget also includes $100 million to help cities and counties hire and retain police officers, which was a top priority for the governor. The final budget also leaves the rainy day fund untouched in response to the governor’s concerns about not leaving enough reserves.

The budget includes the largest tax increases in the state since the early 1980s. The final budget includes raising B&O tax rates on a variety of industries and applies an extra surcharge for businesses with more than $250 million in gross Washington state income. It also applies the sales tax to a variety of services, raises the capital gains tax and estate tax, repeals certain tax preferences, and includes a tax aimed at Tesla. It also includes a 50% increase in the Discover Pass to access state parks, 38% increase in hunting and fishing licenses, and 50% increase in liquor licenses.

The operating budget passed the Senate by a vote of 28-19 and the House by a vote of 52-45.

Highlights from the final operating budget include:

  • $340,000 to the Governor’s Office to continue the work of the Riparian Workgroup.
  • $150,000 for the Northwest Agriculture Business Center.
  • $719,000 is provided for the Department of Commerce to develop a guidebook to support local governments in integrating clean energy development into planning and zoning requirements, including dual-use clean energy technologies and colocation with agricultural uses.
  • $4,664,000 is provided to the Department of Labor and Industries for the creation of an agriculture compliance unit within the division of Occupational Safety and Health.
  • $1,690,000 to the Department of Health to implement actions provided in the nitrate water hazard mitigation plan to support safe drinking water in the lower Yakima Valley.
  • $2,954,000 to the Department of Health for the fruit and vegetable incentives program.
  • $3,826,000 to the Employment Security Department for the continuation of the Office of Agricultural and Seasonal Workforce Services.
  • $2,468,000 is provided for Ecology for addressing air quality in overburdened communities highly impacted by air pollution under RCW 70A.65.020.
  • $2,256,000 is provided to Ecology to provide technical assistance to landowners and local governments to promote voluntary compliance for critical riparian management areas.
  • $331,000 of the natural climate solutions account-state appropriation is provided solely for the department to coordinate implementation of the state’s climate resilience strategy developed pursuant to chapter 70A.05 RCW.
  • $4,008,000 is provided to Ecology to investigate and monitor the sources and impacts of per- and polyfluoroalkyl substances (PFAS) in the environment.
  • $750,000 is provided to Ecology to identify additional priority consumer products containing PFAS for potential regulatory action and issue orders to manufacturers to obtain ingredient information.
  • $400,000 is provided to Ecology to develop a report that analyzes equity and accessibility considerations for environmental incident reporting and resolution, and to provide recommendations for changes and improvements.
  • $275,000 is provided to Ecology to publish a directory of retail fuel sellers who offer fuel to agricultural users without a carbon surcharge.
  • $1,000,000 is provided to the Conservation Commission to connect scientists, practitioners, and researchers and coordinate efforts to monitor and quantify benefits of best management practices on agricultural lands and better understand values and motivations of landowners to implement voluntary incentive programs.
  • $10,719,000 is provided to the Conservation Commission for implementation of the Voluntary Stewardship Program.
  • $1,000,000 is provided to the Conservation Commission to increase native tree and shrub availability for riparian restoration projects under the governor’s salmon strategy
  • $2,278,000 is provided to the Department Fish and Wildlife to provide additional capacity to the attorney general’s office to prosecute environmental crimes. The department must provide an annual report by Dec. 1 of each year, to the appropriate committees of the Legislature on the progress made in prosecuting environmental crimes.
  • $1,120,000 is provided to the Department of Fish and Wildlife for management of pinniped populations on the lower Columbia River and its tributaries with the goal of increasing chinook salmon abundance and prey availability for Southern Resident Orcas.
  • $6,042,000 is provided the Department of Fish and Wildlife to continue and increase the capacity to analyze salmon contaminants of emerging concern (CEC), including substances such as 6PPD-quinone, per- and polyfluoroalkyl substances (PFAS), and polychlorinated biphenyls (PCB) in already collected tissue samples.
  • $1,490,000 is provided to the Department of Agriculture to increase capacity and support work to reduce nitrate pollution in groundwater from irrigated agriculture in the lower Yakima Valley.
  • $118,000 is provided to the Department of Agriculture to continue the work of the Pesticide Application Committee.
  • $150,000 is provided to the Department of Agriculture to collaborate with local organizations and community leaders to provide agricultural and economic support, training, and services to those historically marginalized and underrepresented in agriculture and ranching across the state.

Final Capital Budget

The Legislature passed the bi-partisan 2025-2027 capital budget on the last day of session. The $7.5 billion budget funds construction and infrastructure projects across the state. Highlights include:

  • Over $60 million for the Columbia River Water Supply Development Program, including the Odessa Groundwater Replacement Program.
  • More than $50 million for Yakima River Basin Water Supply.
  • $8.5 million to repair and rebuild the Yakima-Tieton Irrigation Canal.

Final Transportation Budget

On the final day, the Legislature also passed a $15.5 billion transportation plan, including a 6 cent gas tax increase for the first time in almost a decade. The gas tax will jump to 55.4 cents per gallon from its current 49.4 cents. Diesel drivers will also be impacted with diesel seeing a 6 cent total hike — 3 cents in 2025 and another 3 cents in 2027. Beginning in 2026, most fuel taxes would automatically increase 2% per year based on inflation. Diesel, too, will see its inflation-based costs increase starting in 2028. The Senate passed the bill by a vote of 34-13 and the House by a vote of 80-18.

Notable Bills that Passed this Past Week:

  • Agricultural Fuel Exemption (Engrossed Second Substitute House Bill 1912), sponsored by Rep. Tom Dent (R-Moses Lake), makes it easier for farmers to receive the exemption they were promised under the Climate Commitment Act for fuel used for agricultural purposes. The final bill requires Ecology to publish a directory by October 1st to notify farmers of retail fuel sellers that sell exempt fuel used for agricultural purposes. The bill also declares it is the legislative intent to continue the rebate program similar to the budget proviso from last year through June of 2027 for farmers who are not able to get exempt fuel. Finally, it extends the exemption for fuel used to transport agricultural products on public highways until Dec. 31, 2029. The final bill clarified that all propane uses for agriculture are exempt until 2030. The House concurred in Senate amendments by a vote of 94-2 on April 24. The bill has been delivered to the governor for his signature. This was a top priority of Gov. Ferguson and he is expected to sign.
  • Unemployment Benefits for Striking Workers (Substitute Senate Bill 5041), sponsored by Senator Marcus Riccelli (D-Spokane), allows workers who choose to go on strike to be eligible for unemployment insurance (UI) benefits for up to six weeks. Earlier in the legislative session, the Senate approved a 12-week limit on striking workers receiving the benefits, and the House approved four weeks, but the chambers compromised on six weeks. The bill requires the state’s Employment Security Department to submit annual reports to the Legislature with data on the prevalence of strikes in the state and the cost of benefits for striking workers for Washington’s unemployment insurance trust fund. The bill now heads to the Governor for signature. If it becomes law, the bill would take effect on Jan. 1, 2026, and is set to expire Dec. 31, 2035. Washington would join New York and New Jersey, which already provide unemployment insurance for striking workers.
  • Enhanced Producer Responsibility Program (EPR) (Engrossed Second Substitute Senate Bill 5284),sponsored by Senator Liz Lovelett (D-Anacortes), requires producers of certain product packaging to participate in and fund the operations of a producer responsibility organization (PRO) related to the postconsumer management of covered PPP and other recycling-related activities. After several years of the bill dying on the House floor, the bill passed the legislature on April 14 by a vote of 51-45. The logjam broke after an amendment was offered and passed that requires the formation of an equity subcommittee, In addition, it also requires that the first PRO not take effect after the adjournment of the 2029 regular legislative session, in order to allow an opportunity for the 2029 legislature to determine whether to amend PRO-related requirements, make other recycling policy changes including the establishment of a bottle deposit return program, or allow for the draft PRO plan to be implemented in full. The bill contains a couple of important amendments for agriculture. First, it exempts agricultural producers will less than $5 million in gross revenue from in-state sales. Second, it prohibits a retailer from assigning responsibility to a person who produces an agricultural commodity introduced under the brand or trade of another manufacturer. On April 23, the Senate concurred in the House amendments and the bill now goes to the governor for his signature. Several groups have already sent in letters requesting that the governor partially veto the legislation and just move forward with a needs assessment on the state recycling system in the state first before implementing an EPR program.

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