Fiscal Fallout: WA budget spending increased by 230% since 2001

“I do hope we dig in and really understand collectively kind of where we're at, how we got here... at least develop some sense of a path forward for the state and our operating budget,” Sen. June Robinson said at the July 20 meeting. Robinson is the chair of the Senate Ways and Means Committee and a member of the state Economic and Revenue Forecast Council.

The July meeting launched work by The Pew Charitable Trusts to come up with recommendations to the Legislature on how to address the budget crisis. The recommendations will be finalized in November. 

The severity of the state’s fiscal crisis was conveyed in a June letter by Office of Financial Management Director K.D. Chapman-See to state agencies warning them that “there will be significant budget shortfalls next biennium in both operating and transportation budgets. I want to be clear that we do not yet know precisely how significant the shortfalls will be.

“This year’s revenue forecasts will likely not provide sufficient support for the maintenance of current programs, let alone any expansions, despite recent tax code changes,” she added.

In the 2001-2003 biennium, the state operating budget was $24.5 billion, according to data provided by the Office of Financial Management. That spending has increased by $56 billion since then, with spending at $80.7 billion for the 2025-27 biennium. Adjusted for inflation, the 2001-03 operating budget would now be $46.3 billion if spending levels remained unchanged. The ERFC’s outlook for the 2026 supplemental budget put forecasted revenue for the biennium at $79.6 billion.

House Budget Coordinator Andy Toulon explained that during those years the state accrued significant financial obligations, including the 2013 McCleary decision by the state Supreme Court that required the state Legislature fully fund basic education. Prior to that, portions of basic education spending was covered by local school levies.

According to Toulon, 42% or $23.5 billion of the increased operating budget spending since 2001-03 was in basic education, while social services made up 26% of the increased spending. Toulon was uncertain what portion of that increased spending represented a shift from local levies to state spending.

The state has also experienced a rise in tort claim liability in recent years, which could be as high as $1 billion annually. Much of that was due to lawsuits against the Department of Children, Youth, and Families.

However, ERFC member Rep. Travis Couture mentioned at the July 20 meeting that tort liability isn’t included in their forecast outlooks.

“Obviously it's not necessarily spending or anything, but kind a balance sheet, you would want to know your long term liabilities,” he said.

Outlook Coordinator Corban Nemeth told Couture that “the funding of those liabilities in the future time period would be a policy level decision of a future legislature and as such are not captured by default on the outlook.”

While the state’s fiscal challenges have been attributed in part to inflation, Toulon said that even when adjusted for inflation spending per capita has increased since 2002 by between 21-41% according to the Seattle Consumer Price Index. The exact percentage depends on which measures are used, Toulon said.

Unadjusted for inflation, spending per capita has increased by 150% since 2002.

Toulon noted that there are “different indexes and there's different perspectives that people might have about what the best index is to use for state spending. These are two common measures.”

The Center Square has previously reported that state spending has increased by 115% since 2015, though that represents both state and federal funding for the budget.