SEATTLE'S MORNING NEWS

Former AG Rob McKenna blames Washington’s $1.7 billion payout crisis on ‘strict liability regime’

Jun 24, 2026, 12:00 PM | Updated: 3:03 pm

millionaires' tax...

Exterior of the Washington state Capitol campus. (Photo: Julia Dallas, MyNorthwest)

(Photo: Julia Dallas, MyNorthwest)

Washington’s self-insurance liability fund has fallen more than $1.7 billion into deficit, driven by a surge in large legal settlements and judgments, according to state financial officials.

The Office of Financial Management recently authorized the state’s Liability Account to operate in a temporary cash deficiency of up to $1.7 billion through June 30, 2027, citing the timing of payments for settlements and judgments against the state. Officials said several large payments remain under federal review, directly impacting the need for increased deficit authority.

Former Washington Attorney General Rob McKenna said the mounting payouts largely stem from situations in which the state is held responsible for harm caused by others.

“These really large payoffs, which over the last year have totaled about $500 million, are generally resulting from the actions of third parties, not the direct actions of someone in government,” McKenna said.

He pointed to the state’s child welfare system as an example of how liability can attach regardless of the decision made.

“If a child was left in foster care and something bad happens, then, because the foster parents do something bad and harm the child, the state is liable,” McKenna said. “On the other hand, if the child is not put in foster care and is left with the parents and something bad happens, the state is liable. So we’re in kind of a strict liability regime.”

McKenna says other states have limits on liability payouts

While McKenna said compensation is appropriate when the state causes harm, he argued Washington stands apart from other states.

“Every other state has some sort of limit on how much can be paid out, and yet in a recent case in Washington, where two children were left in the care of their parents and harmed by the parents, the state settled for $80 million,” he said.

The Department of Children, Youth, and Families has been at the center of many of the payouts. McKenna said the agency is settling cases to avoid even larger jury verdicts.

“What’s going on is that they are afraid that the judgments in court will be even larger if they go to a jury trial,” he said, citing a roughly $130 million jury award involving the death of a toddler. “They’re worried about juries here in western Washington handing out enormous judgments, and so they’re settling for enormous amounts to avoid the even larger judgments.”

The money to cover the judgments ultimately comes from taxpayers, McKenna said.

“It comes from state general funds,” he said. “Every state agency has a budget for legal expenses and for payouts. That money has to come from somewhere. It comes from state budgets, but state budgets get their money from the taxpayers.”

‘We need guardrails’: McKenna pushes for liability limits as budget shortfall looms

The strain comes as Washington faces a projected multibillion-dollar budget shortfall.

McKenna said the solution lies in adopting limits used elsewhere, an issue he examined in a 2005 law review article written during his tenure as attorney general.

“Other states have some sort of guardrails on the amount that they can be liable for, and this is true for local governments as well,” he said. “We need to get rid of the open-ended waiver of what’s called sovereign immunity and have a statutory scheme that defines the extent of liability for various government functions like children’s welfare.”

He noted Washington was paying out far more than comparable states even two decades ago.

“I think it was six times more than Massachusetts per year at that time,” McKenna said. “We need to put in some guardrails and put limits on the amounts that people can recover from the state, which is what other states do.”

Manda Factor is the host of “Seattle’s Morning News” on KIRO Newsradio. Follow Manda on X and email her here

Seattle's Morning News

pierce county school levy tax...

Charlie Harger

Harger: Pierce County forgot to charge me for a school levy, sent a letter blaming nobody, and wants $1,100 by November

I got a letter from the Pierce County Assessor-Treasurer, informing us of a "discrepancy" on our 2026 property tax statement. Not a mistake. A discrepancy.

2 days ago

spokane wildfire arson...

Charlie Harger

Harger: A killer. Medium to high risk. Questioned about arson 3 times. 2 states had his file. Hundreds of homes in Spokane are gone

The situation in Spokane is hard to believe. A man has been arrested and is being held on suspicion of starting the biggest of those three fires.

3 days ago

bite of seattle shooter spd...

Charlie Harger

Harger: The Bite of Seattle shooter is still out there. SPD won’t release a description. Here’s what may be slowing this investigation down

I'm frustrated. I don't have inside information. What I have is police reports, public statements, and the same questions you have.

4 days ago

primary ballot august...

Charlie Harger

Harger: My primary ballot is sitting on my microwave. If a politics nerd is cramming, the August primary isn’t working

We moved primaries from September to August in 2008 to give election officials more time to process mail-in ballots. That made logistical sense. For actually getting people to vote, it's a flop.

5 days ago

shoplifting washington retail theft...

Charlie Harger

Harger: Washington leads the nation in retail theft. Vancouver’s answer is to stop citing shoplifters. What could go wrong?

A study ranked us No. 1 among the states for retail theft impact. No. 1. Out of 50. The study found Washington had 48% more reported retail theft than our share of the national population would predict.

6 days ago

blue angels the seattle times...

Charlie Harger

Harger: The Seattle Times wants to ban the Blue Angels. I’ve changed my mind. They’re right

Thanks to The Seattle Times' editorial board, I've changed my mind. The Blue Angels don't belong in modern Seattle. Not because they're loud. Not because they're military. Because they're just too exciting.

9 days ago

Former AG Rob McKenna blames Washington’s $1.7 billion payout crisis on ‘strict liability regime’