Ferguson: ‘I won’t be proposing new taxes’ — but ‘Does that mean cuts? Well of course’

Washington Governor Bob Ferguson said he will not be proposing any new taxes in his upcoming budget.

“I’ve been pretty clear in the budget that I’ll be proposing that I won’t be proposing new taxes,” Ferguson said at a news conference Thursday. “Does that mean cuts? Well, of course.”

Ferguson said the state will likely be facing a multi-billion-dollar shortfall in the next session. As a result, programs, including those added since 2019, will be under scrutiny.

Ferguson said spending must match revenue forecasts to protect Washington’s AAA bond rating. He said he’s telling legislators he has an expectation of no tax increases.

But Ferguson stopped short of committing to veto a tax increase should it come across his desk, noting it is more than a year until the end of the upcoming legislative session.

“We’re talking about, first of all, something that’s many months away,” he said. “First, what I’ve got in front of me is my proposed budget, which will not have taxes. Number two, what I’m communicating to legislators is that my expectation is we get through this budget cycle this next session without raising taxes. And I’m being very clear about that expectation.”

Republican senator says she’s ‘highly skeptical’ of the governor’s pledge

Republican State Senator Judy Warnick noted a previous promise made by Ferguson to not raise taxes, though one of the first things he did in his term was exactly that.

“I’m highly skeptical about that,” Warnick told The Jason Rantz Show on Seattle Red 770 AM. “There was that promise right away, that first state of the state address, we’re not going to raise taxes, his campaign, we’re not going to raise taxes, and then the first thing he does is sign the largest tax increase ever.”

She doesn’t believe Ferguson will “stick to his guns” given what she calls the Democratic Party’s “propensity to spend.”

The state has “a spending problem, not a revenue problem,” she said.

WA’s 2027-29 budget math already doesn’t work, even before federal Medicaid cuts hit

The legislature’s own analysts project a $4 billion shortfall for the two-year budget that begins in 2027. That’s the cost of keeping the state doing what it’s already doing. No new programs. No expansions. No raises. Holding still costs $4 billion more than the state will have.

Every revenue forecast since has been revised downward, cutting roughly $2 billion combined across the current budget and the next. None of it has stopped.

Now the federal Medicaid changes arrive. H.R. 1, the 2025 federal budget law, adds work requirements, more frequent eligibility checks, and tighter rules on how states pay for Medicaid. Washington’s Health Care Authority said more than 620,000 Apple Health enrollees will face them. OFM estimates up to $1.3 billion a year in lost hospital reimbursements, plus hundreds of millions in lost state savings.

It hits in the same budget cycle as that $4 billion gap.

The millionaires’ tax, the new income tax on high earners that Democrats in Olympia passed this spring, doesn’t start collecting until 2029. A court challenge is pending. Initiative supporters are gathering signatures right now for a measure that would allow voters to reject the tax outright.

Ferguson announces Economic Development Council

Contributing: Charlie Harger; Aaron Granillo, KIRO Newsradio

Frank Lenzi is the News Director for KIRO Newsradio. Read more of his stories here.

Follow @FrankLenziKIRO