Washington State Legislative Update: Budgets, Taxes and Bill Signing Wrap Up & Campaign Season Preview

Budget, Taxes, & Bill Signings

Governor Bob Ferguson wrapped up his role in the legislative process on the afternoon of May 20^th, signing into law the Legislature’s five-part, $9.5 billion tax increase package, as well as the state’s 2025-27 operating, transportation, and capital budgets and their funding bills. This final bill action came despite a mounting campaign from many quarters of the business community (and others) to veto some or all of the largest tax increases underlying the operating budget. As a reminder, the five tax bills are SB 2077, imposing taxes on the banking and sale of manufacturer credits under the state’s zero-emission vehicle program, HB 2081, increasing B&O rates and adding surcharges, SB 5813, increasing capital gains and estate taxes, SB 5814, imposing a sales tax on services and excise tax on nicotine products tax, and SB 5794, repealing various preferential B&O tax rates. On the last bill, the Governor vetoed a provision removing the mortgage interest deduction for community banks. Finally, the Governor signed the operating budget (SB 5161) referencing some line-item vetoes, without specifying the subject or amount of the stricken appropriations.

All told, over 430 bills made their way to the Governor’s desk, and he issued no full vetoes. In addition to line-items in the three budgets, he issued partial vetoes of minor matters in four pieces of legislation, relating to emergency clauses, working groups, or other matters he viewed as redundant. Besides the budget and taxes, other “big ticket” bills signed in the last few days included controversial measures imposing residential rent control (HB 1217), and providing unemployment insurance benefits to workers who go on strike (SB 5041).

Unless subject to an emergency clause or another specified effectiveness date, bills enacted this year will go into effect on July 27^th, 90 days following the conclusion of the legislative session.

Special Election Season Preview

Candidate filing week ended on May 9^th, and with many legislative vacancies filled by appointments leading into the session, there are nine special races this fall in which House and Senate appointees must stand for election for the remainder of their term.  

26^th District (Gig Harbor/Kitsap County area)

This Senate race will feature a matchup between Democratic appointee and first-term Senator Deb Krishnadasan, a local school board member and public education advocate, and Rep. Michelle Caldier, a five-term House member and dentist. A true swing district, this race has the highest likelihood of altering the balance of power in the Senate, should Caldier succeed, and will accordingly attract the most visibility.

48^th District (Bellevue/Kirkland area)

In the Senate race, former House member and Democratic appointee Vandana Slatter is facing a challenge from fellow Democrat and current House member Amy Walen. In the House race, Democratic appointee and political newcomer Osman Salahuddin is facing a challenge from Democrat and small business owner Ranga Bondada, and Republican and recently unsuccessful Redmond City Council candidate Dennis Ellis. The Senate race will attract considerable attention as it carries the prospect of moderating the progressive bent of the Senate Democratic caucus should generally business-friendly Rep. Walen succeed.

5^th District (Issaquah area)

In the Senate, following the unexpected passing of Senator Bill Ramos in the final week of the session, Democrat and current House member Victoria Hunt will face off against Republican and former House member Chad Magendanz. Hunt is a first-term member of the House, former member of the Issaquah City Council and an environmental science Ph.D. Magendanz served two terms in the House and is a former naval officer and software developer. Magendanz ran for this seat in 2024, losing to Sen. Ramos by 3,400 votes.

33^rd District (South King County)

In the Senate race, Democratic appointee Tina Orwall, a long-time House member prior to her appointment to the Senate, is running unopposed. In the House race, Democratic appointee Edwin Obras, a City of Seattle Human Services employee, is facing a challenge from Democrat Kevin Schilling, the current mayor of Burien and government affairs director for the state dental association, and Republican Darryl Jones, whose political resume includes an unsuccessful run for Kent City Council in 2023. Schilling is generally regarded as a centrist Democrat, whose election, should he succeed, could add another moderate voice to the House Democratic Caucus.  

41^st District (Eastside area)

In the 41^st District House race (Bellevue/East Side), Democratic appointee Janice Zahn is facing a challenge from Democrat Vinita Kak and Republican John Whitney. Zahn is a former Bellevue City Council member and chief engineer at the Port of Seattle, while Kak is a City of Newcastle planning commission member, and Whitney is a Bellevue-area real estate agent and property manager.

34^th District (Seattle/West Seattle area)

For the Senate seat, Democratic appointee Emily Alvarado is running unopposed, and in the House Democratic appointee Brianna Thomas is also running unopposed.

The primary election will be held on August 5^th. With most races featuring only two candidates, they will also advance to the November 4^th general election, along with the top two vote-getters in the two House races that feature three candidates.

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