Harger: Budget shortfall, rising costs await WA lawmakers in 2026 session

The champagne’s flat. The confetti’s in the trash. And in 10 days, state lawmakers head back to Olympia.

Here’s what’s waiting for them.

A budget gap somewhere between $2.3 billion and $4 billion, depending on who’s counting and how far out you look. Federal money is drying up. The Trump administration is cutting Medicaid and SNAP, and states like ours that didn’t vote for him probably shouldn’t expect any favors. That’s not even counting federal childcare money being cut off this week. For years, Olympia built programs assuming Washington, D.C. would keep writing checks.

That era appears to be ending

At the same time, families are struggling. Housing costs keep climbing. Child care is out of reach for many. Groceries, gas, energy. Everything costs more. The Climate Commitment Act sits at the center of a genuine tension. Does it protect our future, or does it make the present unaffordable? Reasonable people disagree on this one. Genuinely.

Then there’s homelessness. Billions have been spent. And yet, drive through parts of Seattle or Olympia or Aberdeen and ask yourself: where did the money go? I haven’t heard a satisfying answer. Have you?

Here’s the uncomfortable reality. Washington’s tax system is regressive. We lean heavily on sales taxes, which hit lower-income families hardest. Progressives are right to point that out. But every time someone proposes a structural fix, half the state objects. We’re stuck in a loop.

Which brings us to Governor Ferguson’s announcement before Christmas. He’s backing a 9.9% income tax on residents earning over a million dollars a year. Less than half a percent of the population. Expected to raise $3 billion annually.

But that money doesn’t arrive until 2029. The hole is now.

And there’s a risk worth considering. Jeff Bezos moved to Florida in late 2023, shortly after our capital gains tax took effect. He later sold over $13 billion in stock, with estimated tax savings north of $600 million. Will other high earners follow if we add an income tax? Maybe not. But it’s worth asking.

Ferguson said the threshold would stay at a million dollars. He’d even support a constitutional amendment locking that in. But the House Majority Leader already said his caucus won’t limit how the revenue gets spent. What starts as a millionaire’s tax has a way of creeping downward when budgets get tight.

And the bigger issue keeps getting sidestepped. Spending.

Washington’s state budget has more than doubled in recent years, outpacing inflation. Programs have been added. Services expanded. Hard decisions kicked down the road.

Let’s be clear-eyed about the reality in Olympia. Democrats hold massive majorities in both chambers. Republicans can make noise, but they don’t have the votes to change much of anything. If spending is going to be addressed, Democrats will have to be the ones to do it.

Maybe there is a Democrat with a heart and a calculator. Someone who cares deeply about people in need but also understands: not everything we want is something we can afford.

Olympia has 60 days. The choices won’t be easy.

Is anyone ready to make them?

Charlie Harger is the host of “Seattle’s Morning News” on KIRO Newsradio. You can read more of his stories and commentaries here. Follow Charlie on X and email him here. 

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