(888) 246-4466
PIA Western Alliance

← News & Press

Budgets cross over, major tax bills wait in the wings, and just eleven days remain in session

Published March 2, 2026 at 9:52 AM · Legislative Advocacy - Washington

The Legislature cleared another cutoff deadline this past Wednesday, as opposite-house policy bills needed a vote out of committee to continue moving. Tomorrow, March 2nd, is the deadline for bills with fiscal impact, not otherwise necessary to implement the state budget, to make it out of their opposite-house fiscal committee. Once that final committee deadline is cleared, the remaining ten days of session will focus on floor activity, with the opposite-house floor cutoff looming on Friday, March 6th. Now that the chambers have passed their versions of the operating, transportation, and capital budgets this past week, conference committees will negotiate in the background while the majority continues to work on big-ticket revenue bills.  

Below are selected highlights from the past week, along with a look ahead to notable action in the coming days. Additional bills being tracked, including those with upcoming action, are detailed in the attached bill report.

Budgets

  1. Operating: House and Senate Democrats are negotiating competing 2025–27 supplemental operating budgets (HB 2289, SB 5998) to address a roughly $2.3 billion shortfall driven by rising Medicaid, special education, long-term care, collective bargaining, and tort liability costs. Both proposals increase spending by roughly $2–2.3 billion over the enacted biennial budget (to approximately $79–80 billion total), rely on substantial Rainy Day Fund withdrawals, redirect capital gains revenues to the general fund, and assume future revenue from the “Millionaire’s Tax” that would not generate receipts until 2028. The Senate spends more overall and focuses on backfilling Medicaid and liability pressures, while the House relies more heavily on transfers, and higher reversion and accounting assumptions. Both plans balance on paper over four years but leave thin reserves and depend significantly on uncertain income tax revenues. Having passed the Senate on Friday on a 30-19 vote, the House passed its version after 12 hours of floor debate Saturday, 52-41 with five Democrats crossing party lines to oppose.
  2. Transportation: A more bipartisan affair, the supplemental transportation budgets came out of the House and Senate this week (HB 2306, SB 6005), with both chambers passing their versions unanimously on Friday and Saturday. The Senate proposal increases spending by $1.5 billion (to about $17 billion total) and relies on significant new bonding to fund maintenance and preservation, ferries, and safety initiatives, while the House increases spending by $1.1 billion (to roughly $16.5 billion) without new bond authorization. Both proposals prioritize maintenance and ferries but differ significantly on bonding and overall spending growth.
  3. Capital: The House and Senate supplemental capital budget proposals (HB 2295, SB 6003) were also rolled out this week, and passed unanimously in the Senate Friday. Both budgets focus on infrastructure, housing, schools, and environmental priorities, with the House proposing a larger $910 million package with $221 million more to housing and homelessness and $78 million more to school construction, while the Senate plan adds $723 million with $150 million to affordable housing and $93.6 million to K-12 modernization. Both proposals are project-driven with differences primarily in overall spending levels and areas of emphasis.  

Taxes

  1. Income Tax: Having previously passed the Senate 27-22, SB 6346 – the 9.9% “Millionaire’s Tax” -- was heard in the House Finance Committee on Tuesday, and voted out of committee on Friday. A notable committee amendment was adopted, led by Democratic Socialist Shaun Scott. In a letter sent to House leadership this week, co-signed by a dozen fellow progressive members of the Democratic caucus, Scott argued against the Senate provision ending the B&O tax surcharge on large corporations a year earlier than planned, at a cost of $550 million. It was stripped in committee. Meanwhile, Governor Bob Ferguson has stated publicly that the House and Senate have not done enough tax relief in their competing proposals, and he believes time may be running out before the end of session. However, both House and Senate budgets depend on projected revenue from the tax, a reality that could force a special session if votes in the House cannot be secured to pass the bill. Finally, Rep. Amy Walen’s competing approach, HB 2738, with no marital penalty, more generous deductions, a sales tax rate drop, and no block on citizen referendum, remains out there as an option for moderates.
  2. Local Government Taxing Authority:  HB 2442, expanding the use of local property tax revenues, authorizing a new 0.01 percent sales tax increase to fund child and family services, and expanding the authorized use of sales tax revenue by counties and cities, was heard in the Senate Ways & Means Committee on Thursday and is scheduled for a committee vote on Monday.
  3. B&O Insurance Tax Exemption Removal: HB 2487 and SB 5949, seeking to overturn the Envolve case by expanding the B&O tax to cover more activities of insurance companies currently subject to the premium tax, was pulled from the Rules Committee Friday on the House side, while behind-the-scenes discussions are active between insurance industry representatives, legislators, and the Department of Revenue. $55 million from the proposal’s retroactive application to certain insurance companies’ activities is booked in both the House and Senate budget proposals.
  4. New Premium Tax Surcharge on Insurers: Also impacting insurers, HB 2745 was introduced on Friday and set for public hearing in the House Finance Committee on Monday. It would surcharge the 2% insurance premium tax that most all insurance companies pay to 2.75% for one year and use the increased revenue to fund federally reduced premium subsidies for individual health plans on the state’s health care exchange. The proposal also purports to prohibit insurers from factoring the tax increase into their premium rate setting for 2026. It has drawn universal opposition from insurers but illustrates the fact that House Democrats are serious about funding these subsidies and are searching far and wide for the revenue to do it.

Sales Tax on Services

  1. SB 5814 Follow Up: Modifications to last year’s SB 5814 continue to percolate in two different areas. The Senate’s income tax proposal noted above would repeal all but the advertising portion of the sales tax on services in four years, and the House amendments to the bill in the Finance Committee Friday would speed up that repeal by one year. Meanwhile, HB 2257 and SB 6113, the Department of Revenue’s “technical fix” bill, have attracted more immediate exemption requests, for example from K-12 schools and non-profit associations subject to the sales tax on educational programming and live events. Prior versions of the House version contained these exemptions. However, the Senate vehicle was heard Friday in the House Finance Committee and is scheduled for executive session on Monday. As of Sunday morning, no amendments had been posted.   

Labor and Employment

  1. HB 2471, the NLRB “trigger” bill creating state-level labor relations regulation in the event federal law no longer pre-empts state law or the National Labor Relations Board declines or loses jurisdiction over labor disputes, was voted out of the Senate Ways & Means Committee on Thursday and is in the Rules Committee awaiting a likely pull to the floor. Thus far the Senate has not made any changes to the version passed out of the House.
  2. HB 1155, banning non-compete agreements and limiting non-solicitation agreements, was voted out of the Senate Labor & Commerce Committee on Tuesday with modest employer-sought clarifications adopted, and then pulled from the Rules Committee to the floor on Friday.
  3. HB 2105, the Attorney General’s Immigrant Worker Protection Act, requiring 72-hours’ notice to current and former employees of a federal I-9 work eligibility audit, was heard in the Senate Ways & Means Committee on Thursday and is set for a committee vote on Monday. Business groups are actively targeting the bill’s expansive private right of action and severe penalties for errors.

Payroll-Tax-Funded Programs and Workers’ Compensation

  1. SB 5847, narrowing the Labor & Industries medical provider network and imposing penalties for employers found to have directed medical care, was heard in the House Appropriations Committee on Friday and scheduled for a committee vote on Monday. As voted out of the House Labor Committee, new non-appropriated hiring authority for 150 new Labor & Industries claims managers was added, which employer groups are looking to either strip or subject to accountability guardrails.
  2. SB 6136, requiring additional transparency in industrial insurance rate-setting, was voted out of House Labor on Tuesday and is sitting in House Rules. It needs to move off the floor by Friday to remain alive.
  3. SB 5292, modifying the statutory basis for setting Paid Family & Medical Leave premium rates in favor of actuarial determination, was heard Tuesday in House Labor and voted out of committee on Wednesday. It is in the House Rules Committee.

Liability Reform and Litigation

  1. HB 2095, creating a presumption of negligence for motorists involved in collisions with “vulnerable roadway users,” was originally set for a cutoff vote in the Senate Law & Justice Committee, but was pulled from consideration. Poison pill amendments adopted on the House floor allowing prevailing defendants to recover attorneys’ fees and increasing a plaintiff’s burden of proof proved successful on the Senate side.  
  2. SB 6239, regarding tort claims against the state and its political subdivisions, never came up for action in the House Civil Rights & Judiciary Committee and is dead for the session, a marquee win for the plaintiffs’ bar.
  3. SB 5360, establishing criminal penalties for environmental incidents, including negligence, died in the House Environment & Energy Committee at cutoff, after a strange bedfellows coalition of industry and labor teamed up in strong opposition.

Insurance

  1. SB 5928, requiring disclosure of wildfire risk scores and models, was heard Tuesday in the House Consumer Protection & Business Committee and was originally set for a cutoff vote on Wednesday, but was not considered in executive session and is now dead.  
  2. SB 6079, establishing a wildfire mitigation grant program while restricting underwriting based on IBHS designations, met the same fate as the disclosure bill.
  3. SB 6031, strengthening OIC’s fraud prevention tools, to some surprise, also died at cutoff in committee after it was pulled from executive session on Wednesday.  
  4. SB 6178, banning post-loss assignments of benefits in property insurance, another surprise and the fourth of the Commissioner’s priority request bills pending in the House, also died at cutoff Wednesday after being pulled from the executive session agenda.
  5. SB 6248, adopting the NAIC model travel insurance regulation, did survive Wednesday’s Consumer Protection & Business executive session, and was referred to the Appropriations Committee, where it was heard on Friday and scheduled for a further vote on Monday.
  6. HB 2428, requiring proof of delivery for life insurance lapse notices, was pulled from the Senate Rules Committee on Friday and is awaiting floor action.   Lobbying Sevices by...