Washington Gov. Ferguson Signs $78B Budget With $9B Tax Increases

Washington Governor Bob Ferguson signed the state's $78 billion two-year operating budget along with a package of tax increases designed to close a projected multi-billion dollar deficit. The budget, balancing spending cuts, new investments, and roughly $9 billion in new revenue over four years, includes hikes to capital gains, estate, business and occupation, sales taxes, and a gas tax increase. Ferguson emphasized the budget protects core services despite his earlier reluctance to raise taxes, noting limited revenue options amid federal funding uncertainties. He used veto powers to eliminate about $25 million in spending but vetoed only one part of the revenue package, acknowledging that future adjustments to tax policies might be necessary. The tax hikes have drawn criticism from Republican lawmakers and business groups, who warn of negative impacts on families and employers already facing economic challenges. Ferguson defended the measures as fiscally responsible choices amid a significant budget shortfall and rejected a proposed wealth tax, which he had previously opposed.