Budgeting process

AN ACT Relating to reforming the Washington state budgeting 1
process through requiring prioritized spending on essential state 2
functions, placing limitations on state spending and revenue 3
proposals, and requiring accountability for every dollar spent within 4
the state budget; amending RCW 43.88.030 and 43.88.055; adding new 5
sections to chapter 43.88 RCW; creating a new section; and declaring 6
an emergency. 7
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:8
NEW SECTION. Sec. 1. The legislature recognizes that the 9
exponential growth of state operating budgets is imprudent, 10
unsustainable, and threatens the ability of the state to provide 11
essential services to Washington citizens. While caseloads for 12
essential programs have fallen and revenue collections have reached 13
record levels, the pernicious trend of vastly growing budgets focused 14
on nonessential luxury spending has led to one of the largest budget 15
deficits in state history. 16
These exponential increases in state budgets have come with 17
little benefit to the citizens of Washington state. Over the past 18
decade, Washington state has experienced declining student test 19
scores, fewer students attending postsecondary education, significant 20
spikes in the number of unsheltered homeless individuals in our 21
H-0391.2
HOUSE BILL 1225
State of Washington 69th Legislature 2025 Regular Session
By Representatives Couture, Connors, Low, Jacobsen, Rude, McClintock,
Keaton, Walsh, Ley, Dufault, Barnard, and Caldier
Prefiled 01/09/25. Read first time 01/13/25. Referred to Committee
on Appropriations.
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communities, stagnant carbon emissions, skyrocketing violent crime 1
rates, a worsening housing shortage, severe increases in the cost of 2
housing, steep drops in business climate, and has become one of the 3
least affordable states for working families in the nation. Despite 4
the multitude of promises made about increased state spending to fix 5
these crises, this legislature has unequivocally failed to deliver on 6
these commitments. 7
Therefore, the legislature intends to reform the state budgeting 8
process to require accountability for every taxpayer dollar spent, 9
ensure that lawmakers prioritize spending on essential services prior 10
to luxury spending items or tax increases, and place limitations on 11
state spending to ensure fiscal discipline and responsibility.12
Sec. 2. RCW 43.88.030 and 2023 c 474 s 8035 are each amended to 13
read as follows: 14
(1) The director of financial management shall provide all 15
agencies with a complete set of instructions for submitting biennial 16
budget requests to the director at least three months before agency 17
budget documents are due into the office of financial management. The 18
budget document or documents shall consist of the governor's budget 19
message which shall be explanatory of the budget and shall contain an 20
outline of the proposed financial policies of the state for the 21
ensuing fiscal period, as well as an outline of the proposed six-year 22
financial policies where applicable, and shall describe in connection 23
therewith the important features of the budget. The biennial budget 24
document or documents shall also describe performance indicators that 25
demonstrate measurable progress towards priority results. The message 26
shall set forth the reasons for salient changes from the previous 27
fiscal period in expenditure and revenue items and shall explain any 28
major changes in financial policy. Attached to the budget message 29
shall be such supporting schedules, exhibits and other explanatory 30
material in respect to both current operations and capital 31
improvements as the governor shall deem to be useful to the 32
legislature. The budget document or documents shall set forth a 33
proposal for expenditures in the ensuing fiscal period, or six-year 34
period where applicable, based upon the estimated revenues and 35
caseloads as approved by the economic and revenue forecast council 36
and caseload forecast council or upon the estimated revenues and 37
caseloads of the office of financial management for those funds, 38
accounts, sources, and programs for which the forecast councils do 39
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not prepare an official forecast. Revenues shall be estimated for 1
such fiscal period from the source and at the rates existing by law 2
at the time of submission of the budget document, including the 3
supplemental budgets submitted in the even-numbered years of a 4
biennium. However, the estimated revenues and caseloads for use in 5
the governor's budget document may be adjusted to reflect budgetary 6
revenue transfers and revenue and caseload estimates dependent upon 7
budgetary assumptions of enrollments, workloads, and caseloads. All 8
adjustments to the approved estimated revenues and caseloads must be 9
set forth in the budget document. The governor may additionally 10
submit, as an appendix to each supplemental, biennial, or six-year 11
agency budget or to the budget document or documents, a proposal for 12
expenditures in the ensuing fiscal period from revenue sources 13
derived from proposed changes in existing statutes.14
The budget document or documents shall also contain:15
(a) Revenues classified by fund and source for the immediately 16
past fiscal period, those received or anticipated for the current 17
fiscal period, and those anticipated for the ensuing biennium;18
(b) The undesignated fund balance or deficit, by fund;19
(c) Such additional information dealing with expenditures, 20
revenues, workload, performance, and personnel as the legislature may 21
direct by law or concurrent resolution; 22
(d) Such additional information dealing with revenues and 23
expenditures as the governor shall deem pertinent and useful to the 24
legislature; 25
(e) Tabulations showing expenditures classified by fund, 26
function, and agency; 27
(f) The expenditures that include nonbudgeted, nonappropriated 28
accounts outside the state treasury; 29
(g) Identification of all proposed direct expenditures to 30
implement the Puget Sound water quality plan under chapter 90.71 RCW, 31
shown by agency and in total; and 32
(h) Tabulations showing each postretirement adjustment by 33
retirement system established after fiscal year 1991, to include, but 34
not be limited to, estimated total payments made to the end of the 35
previous biennial period, estimated payments for the present 36
biennium, and estimated payments for the ensuing biennium.37
(2) The budget document or documents shall include detailed 38
estimates of all anticipated revenues applicable to proposed 39
operating or capital expenditures and shall also include all proposed 40
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operating or capital expenditures. The total of beginning 1
undesignated fund balance and estimated revenues less working capital 2
and other reserves shall equal or exceed the total of proposed 3
applicable expenditures. The budget document or documents shall 4
further include: 5
(a) Interest, amortization and redemption charges on the state 6
debt; 7
(b) Payments of all reliefs, judgments, and claims;8
(c) Other statutory expenditures; 9
(d) Expenditures incident to the operation for each agency;10
(e) Revenues derived from agency operations; 11
(f) Expenditures and revenues shall be given in comparative form 12
showing those incurred or received for the immediately past fiscal 13
period and those anticipated for the current biennium and next 14
ensuing biennium; 15
(g) A showing and explanation of amounts of general fund and 16
other funds obligations for debt service and any transfers of moneys 17
that otherwise would have been available for appropriation;18
(h) Common school expenditures on a fiscal-year basis;19
(i) A showing, by agency, of the value and purpose of financing 20
contracts for the lease/purchase or acquisition of personal or real 21
property for the current and ensuing fiscal periods; and22
(j) A showing and explanation of anticipated amounts of general 23
fund and other funds required to amortize the unfunded actuarial 24
accrued liability of the retirement system specified under chapter 25
41.45 RCW, and the contributions to meet such amortization, stated in 26
total dollars and as a level percentage of total compensation.27
(3) The governor's operating budget document or documents shall 28
reflect the statewide priorities as required by RCW 43.88.090.29
(4) The governor's operating budget document or documents shall 30
identify activities that are not addressing the statewide priorities.31
(5)(a) Beginning in the 2021-2023 fiscal biennium, the governor's 32
operating budget document or documents submitted to the legislature 33
must leave, in total, a positive ending fund balance in the general 34
fund and related funds. 35
(b) Beginning in the 2021-2023 fiscal biennium, the projected 36
maintenance level of the governor's operating budget document or 37
documents submitted to the legislature must not exceed the available 38
fiscal resources for the next ensuing fiscal biennium.39
(c) For purposes of this subsection: 40
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(i) "Available fiscal resources" means the beginning general fund 1
and related funds balances and any fiscal resources estimated for the 2
general fund and related funds, adjusted for proposed revenue 3
legislation, and with forecasted revenues ((adjusted)) pursuant to 4
((the greater of (A))) the official general fund and related funds 5
revenue forecast for the ensuing biennium ((, or (B) the official 6
general fund and related funds forecast for the second fiscal year of 7
the current fiscal biennium, increased by 4.5 percent for each fiscal 8
year of the ensuing biennium)). 9
(ii) "Projected maintenance level" means estimated appropriations 10
necessary to maintain the continuing costs of program and service 11
levels either funded in the governor's budget document or documents 12
submitted to the legislature or mandated by other state or federal 13
law, adjusted by the estimated cost of proposed executive branch 14
legislation, and the amount of any general fund moneys projected to 15
be transferred to the budget stabilization account pursuant to 16
Article VII, section 12 of the state Constitution. Proposed executive 17
branch legislation does not include proposals by institutions of 18
higher education, other separately elected officials, or other 19
boards, commissions, and offices not under the authority of the 20
governor that are not funded or assumed in the governor's budget 21
document or documents submitted to the legislature.22
(iii) "Related funds" has the meaning defined in RCW 43.88.055.23
(d) (b) of this subsection (5) does not apply:24
(i) To any governor-proposed legislation submitted to the 25
legislature that makes net reductions in general fund and related 26
funds appropriations to prevent the governor from making across-the-27
board reductions in allotments for these particular funds as provided 28
in RCW 43.88.110(10); or 29
(ii) In a fiscal biennium for which the governor proposes 30
appropriations from the budget stabilization account pursuant to 31
Article VII, section 12(d)(ii) of the state Constitution.32
(6) A separate capital budget document or schedule shall be 33
submitted that will contain the following: 34
(a) A statement setting forth a long-range facilities plan for 35
the state that identifies and includes the highest priority needs 36
within affordable spending levels; 37
(b) A capital program consisting of proposed capital projects for 38
the next biennium and the two biennia succeeding the next biennium 39
consistent with the long-range facilities plan. Insomuch as is 40
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practical, and recognizing emergent needs, the capital program shall 1
reflect the priorities, projects, and spending levels proposed in 2
previously submitted capital budget documents in order to provide a 3
reliable long-range planning tool for the legislature and state 4
agencies; 5
(c) A capital plan consisting of proposed capital spending for at 6
least four biennia succeeding the next biennium; 7
(d) A strategic plan for reducing backlogs of maintenance and 8
repair projects. The plan shall include a prioritized list of 9
specific facility deficiencies and capital projects to address the 10
deficiencies for each agency, cost estimates for each project, a 11
schedule for completing projects over a reasonable period of time, 12
and identification of normal maintenance activities to reduce future 13
backlogs; 14
(e) A statement of the reason or purpose for a project;15
(f) Verification that a project is consistent with the provisions 16
set forth in chapter 36.70A RCW; 17
(g) A statement about the proposed site, size, and estimated life 18
of the project, if applicable; 19
(h) Estimated total project cost; 20
(i) For major projects valued over five million dollars, 21
estimated costs for the following project components: Acquisition, 22
consultant services, construction, equipment, project management, and 23
other costs included as part of the project. Project component costs 24
shall be displayed in a standard format defined by the office of 25
financial management to allow comparisons between projects;26
(j) Estimated total project cost for each phase of the project as 27
defined by the office of financial management; 28
(k) Estimated ensuing biennium costs; 29
(l) Estimated costs beyond the ensuing biennium;30
(m) Estimated construction start and completion dates;31
(n) Source and type of funds proposed; 32
(o) Estimated ongoing operating budget costs or savings resulting 33
from the project, including staffing and maintenance costs;34
(p) For any capital appropriation requested for a state agency 35
for the acquisition of land or the capital improvement of land in 36
which the primary purpose of the acquisition or improvement is 37
recreation or wildlife habitat conservation, the capital budget 38
document, or an omnibus list of recreation and habitat acquisitions 39
provided with the governor's budget document, shall identify the 40
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projected costs of operation and maintenance for at least the two 1
biennia succeeding the next biennium. Omnibus lists of habitat and 2
recreation land acquisitions shall include individual project cost 3
estimates for operation and maintenance as well as a total for all 4
state projects included in the list. The document shall identify the 5
source of funds from which the operation and maintenance costs are 6
proposed to be funded; 7
(q) For any capital budget request for funding in the 2023-2025 8
or 2025-2027 fiscal biennia by an institution of higher education to 9
address a cost increase for any major project, a statement describing 10
the unexpected project costs, ways the agency has mitigated or will 11
mitigate the estimated project costs, and identification of other 12
funding that may be applied to the project. For purposes of this 13
subsection (6)(q): 14
(i) "Cost increases" means total project costs estimated above 15
those listed in the prior agency budget request and for which the 16
legislature relied in making a funding decision for design or 17
construction, adjusted for C-100 inflation factors; and18
(ii) "Institution of higher education" has the meaning provided 19
in RCW 28B.10.016; 20
(r) Such other information bearing upon capital projects as the 21
governor deems to be useful; 22
(s) Standard terms, including a standard and uniform definition 23
of normal maintenance, for all capital projects; and24
(t) Such other information as the legislature may direct by law 25
or concurrent resolution. 26
For purposes of this subsection (6), the term "capital project" 27
shall be defined subsequent to the analysis, findings, and 28
recommendations of a joint committee comprised of representatives 29
from the house capital appropriations committee, senate ways and 30
means committee, legislative evaluation and accountability program 31
committee, and office of financial management. 32
(7) No change affecting the comparability of agency or program 33
information relating to expenditures, revenues, workload, performance 34
and personnel shall be made in the format of any budget document or 35
report presented to the legislature under this section or RCW 36
43.88.160(1) relative to the format of the budget document or report 37
which was presented to the previous regular session of the 38
legislature during an odd-numbered year without prior legislative 39
concurrence. Prior legislative concurrence shall consist of (a) a 40
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favorable majority vote on the proposal by the standing committees on 1
ways and means of both houses if the legislature is in session or (b) 2
a favorable majority vote on the proposal by members of the 3
legislative evaluation and accountability program committee if the 4
legislature is not in session. 5
Sec. 3. RCW 43.88.055 and 2021 c 199 s 103 are each amended to 6
read as follows: 7
(1) The legislature must adopt a four-year balanced budget as 8
follows: 9
(a) Beginning in the 2013-2015 fiscal biennium, the legislature 10
shall enact a balanced omnibus operating appropriations bill that 11
leaves, in total, a positive ending fund balance in the general fund 12
and related funds. 13
(b) Beginning in the 2013-2015 fiscal biennium, the projected 14
maintenance level of the omnibus appropriations bill enacted by the 15
legislature shall not exceed the available fiscal resources for the 16
next ensuing fiscal biennium. 17
(2) For purposes of this section: 18
(a) "Available fiscal resources" means the beginning general fund 19
and related fund balances and any fiscal resources estimated for the 20
general fund and related funds, adjusted for enacted legislation, and 21
with forecasted revenues ((adjusted)) pursuant to ((the greater of 22
(i))) the official general fund and related funds revenue forecast 23
for the ensuing biennium ((, or (ii) the official general fund and 24
related funds forecast for the second fiscal year of the current 25
fiscal biennium, increased by 4.5 percent for each fiscal year of the 26
ensuing biennium)); 27
(b) "Projected maintenance level" means estimated appropriations 28
necessary to maintain the continuing costs of program and service 29
levels either funded in that appropriations bill or mandated by other 30
state or federal law, and the amount of any general fund moneys 31
projected to be transferred to the budget stabilization account 32
pursuant to Article VII, section 12 of the state Constitution;33
(c) "Related funds," as used in this section, means the 34
Washington opportunity pathways account, the workforce education 35
investment account, the fair start for kids account, and the 36
education legacy trust account. 37
(3) Subsection (1)(a) and (b) of this section does not apply to 38
an appropriations bill that makes net reductions in general fund and 39
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related funds appropriations and is enacted between July 1st and 1
February 15th of any fiscal year. 2
(4) Subsection (1)(b) of this section does not apply in a fiscal 3
biennium in which money is appropriated from the budget stabilization 4
account pursuant to Article VII, section 12 (d)(ii) of the state 5
Constitution. 6
NEW SECTION. Sec. 4. A new section is added to chapter 43.88 7
RCW to read as follows: 8
(1) As used in this section, unless the context clearly requires 9
otherwise: 10
(a) "Agency activity" means major activities of state agencies 11
pursuant to RCW 43.88.090 and described in the office of financial 12
management's agency activity inventory for the appropriate biennium.13
(b) "Program" means a service or a group of services designed to 14
accomplish a specific public goal and result in specific public 15
benefits except for those entitlement services listed in the 16
definition of "caseload" under RCW 43.88C.010 (7) and (12). For the 17
zero-based budget review under this section, a program is any 18
distinguishable service or unit that makes up an agency activity. In 19
most cases, an agency activity will encompass several programs, 20
although in some cases the agency activity could be one program.21
(c) "Zero-based budget review" means: 22
(i) Information and analysis regarding an agency's programs 23
prepared by the agency as required by subsection (3) of this section 24
that must be included as a separate document in an agency's biennial 25
budget request under this chapter; and 26
(ii) Consideration of the information provided under (c)(i) of 27
this subsection by the governor and the legislature during the budget 28
development process. 29
(2) Beginning in 2026 and in each even-numbered year thereafter, 30
the legislature must specify, in the omnibus operating appropriations 31
act or in other legislation, programs for which agencies must perform 32
a zero-based budget review under subsection (3) of this section. It 33
is the intent of the legislature that 20 percent of all state 34
programs be subject to a zero-based budget review each biennium, so 35
that every program receives a zero-based budget review within a 10-36
year cycle. When selecting programs for review, the legislature may 37
specify programs by functional area, such as education, health care, 38
other human services, natural resources, and general government, or 39
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may specify programs as prioritized by the legislature. When 1
selecting programs for a zero-based budget review for a particular 2
biennium, the legislature may broaden or narrow the definition of 3
program for specific agencies. 4
(3) Beginning with biennial budget requests for the 2027-2029 5
fiscal biennium and with each biennial budget request thereafter, 6
agencies must submit zero-based budget reviews for the programs 7
identified by the legislature for review that biennium under 8
subsection (2) of this section. Information and analysis submitted by 9
agencies for the zero-based review under this section shall include:10
(a) A statement of the statutory basis or other basis for the 11
creation of each program and the history of each program that is 12
being reviewed; 13
(b) A description of how each program fits within the strategic 14
plan and goals of the agency and an analysis of the quantified 15
objectives of each program within the agency; 16
(c) Any available performance measures indicating the 17
effectiveness and efficiency of each program; 18
(d) A description with supporting cost and staffing data of each 19
program and the populations served by each program, and the level of 20
funding and staff required to accomplish the goals of the program if 21
different than the actual maintenance level; 22
(e) An analysis of the major costs and benefits of operating each 23
program and the rationale for specific expenditure and staffing 24
levels; 25
(f) An analysis estimating each program's administrative and 26
other overhead costs; 27
(g) An analysis of the levels of services provided;28
(h) Where applicable, an analysis estimating the amount of funds 29
or benefits that actually reach the intended recipients; and30
(i) Other information and analysis requested by the legislature 31
in the legislation identifying the agency programs for review under 32
subsection (2) of this section. 33
(4)(a) The governor and legislature shall consider the 34
information and analysis provided by agencies under this section in 35
the budget development process. The house of representatives 36
appropriations committee and the senate ways and means committee 37
shall hold at least one public hearing on the information and 38
analysis submitted by agencies under the zero-based budget review.39
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(b) The information and analysis submitted by agencies under the 1
zero-based budget review process must be filed electronically with 2
the state's fiscal website managed by the legislative evaluation and 3
accountability program committee. 4
NEW SECTION. Sec. 5. A new section is added to chapter 43.88 5
RCW to read as follows: 6
(1) The legislature must enact appropriations for state operating 7
expenditures in separate, prioritized appropriations bills as 8
required by this section. 9
(a) Operating appropriations must be enacted in separate bills 10
for the following purposes: 11
(i) First: For payment of principal and interest on outstanding 12
debt of the state. 13
(ii) Second: For basic public education of children in grades 14
kindergarten through 12. 15
(iii) Third: For assessing and collecting state revenue.16
(iv) Fourth: For public safety. 17
(v) Fifth: For public health. 18
(vi) Sixth: For public assistance programs. 19
(vii) Seventh: For all other state purposes. 20
(viii) Eighth: For the legislature, judiciary, and statewide 21
elected officials in the executive branch. 22
(b) Operating appropriations bills must be enacted in the 23
priority order established in (a) of this subsection. Before either 24
house of the legislature may take a final vote on legislation that 25
raises state taxes, it must first enact operating appropriations 26
legislation that funds the maximum number of operating appropriations 27
bills in priority order with revenues projected for collection under 28
existing tax laws. 29
(c) To implement the requirements of this section, the 30
legislature must assign agencies to one of the priority categories in 31
(a) of this subsection. The legislature may divide the activities of 32
an agency among multiple categories, but it is not required to do so.33
(d) For purposes of this section, "raises state taxes" means any 34
action by the legislature that imposes a new tax, expands a tax base, 35
or increases an existing rate of taxation, including modifications to 36
any tax preference, where such action increases state tax revenue 37
deposited in any state account appropriated in state operating budget 38
legislation. 39
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(e) For purposes of this section, revenue projections are made by 1
the economic and revenue forecast council as established in law, or 2
its successor entity. 3
(2) The legislature must enact all biennial appropriations bills 4
for operating, transportation, and capital purposes no later than 30 5
days before the beginning of the fiscal biennium for which the 6
appropriations are made. 7
NEW SECTION. Sec. 6. This act is necessary for the immediate 8
preservation of the public peace, health, or safety, or support of 9
the state government and its existing public institutions, and takes 10
effect immediately.11
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