State expenditure limit

AN ACT Relating to reinstating a state expenditure limit to 1
promote sustainable budgets and create permanent tax relief for all 2
Washingtonians; amending RCW 43.135.025, 43.88.290, 82.32.385, and 3
43.88.030; adding new sections to chapter 43.135 RCW; and adding a 4
new section to chapter 43.79 RCW. 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:6
NEW SECTION. Sec. 1. A new section is added to chapter 43.135 7
RCW to read as follows: 8
(1) For the fiscal year beginning July 1, 2027, and each fiscal 9
year thereafter, the state shall not expend from the general fund and 10
related funds in excess of the state expenditure limit established 11
under this chapter. 12
(2) For the fiscal year beginning July 1, 2027, and each fiscal 13
year thereafter, the state treasurer shall not issue or redeem any 14
check, warrant, or voucher that will result in a state general fund 15
or related fund expenditure for any fiscal year in excess of the 16
state expenditure limit established under this chapter. A violation 17
of this subsection constitutes a violation of RCW 43.88.290 and 18
subjects the state treasurer to the penalties provided in RCW 19
43.88.300. 20
H-2557.2
HOUSE BILL 2448
State of Washington 69th Legislature 2026 Regular Session
By Representatives Couture, Marshall, Rude, Corry, Jacobsen, Dufault,
Keaton, Schmidt, Connors, Barkis, and Griffey
Read first time 01/13/26. Referred to Committee on Appropriations.
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(3) The state expenditure limit for any fiscal year is the 1
previous fiscal year's state expenditure limit increased by a 2
percentage rate that equals the fiscal growth factor.3
(4) For purposes of computing the state expenditure limit for the 4
fiscal year beginning July 1, 2027, the phrase "the previous fiscal 5
year's state expenditure limit" means the total state expenditures 6
from the state general fund and related funds, not including federal 7
funds, for the fiscal year beginning July 1, 2026, plus the fiscal 8
growth factor. 9
(5) Each November, the economic and revenue forecast council 10
shall adjust the expenditure limit for the preceding fiscal year 11
based on actual expenditures, and known changes in the fiscal growth 12
factor and then project an expenditure limit for the next four fiscal 13
years including any adjustments required under section 2 of this act. 14
If, by November 30th, the economic and revenue forecast council has 15
not adopted the current or projected expenditure limit as provided in 16
this section, the state treasurer shall adjust or project the 17
expenditure limit, as necessary. 18
NEW SECTION. Sec. 2. A new section is added to chapter 43.135 19
RCW to read as follows: 20
(1) If moneys are transferred from the state general fund or 21
related funds to another fund or account on or after July 1, 2026, 22
the economic and revenue forecast council, acting pursuant to section 23
1 of this act, shall lower the state expenditure limit to reflect the 24
shift. For the purposes of this section, a transfer of money from the 25
state general fund or related funds to another fund or account 26
includes any state legislative action taken after July 1, 2026, that 27
has the effect of reducing revenues from a particular source, where 28
such revenues would otherwise be deposited into the state general 29
fund or related funds, while increasing the revenues from that 30
particular source to another state or local government account.31
(2) If the cost of any state program or function is shifted from 32
the state general fund or related funds on or after July 1, 2026, to 33
another source of funding the economic and revenue forecast council, 34
acting pursuant to section 1 of this act, shall lower the state 35
expenditure limit to reflect the shift. For the purposes of this 36
section, shifting the cost of a state program or function includes 37
shifting current funding, funding growth, or funding program 38
enhancements from a source other than the state general fund or 39
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related funds when that program or function has historically been 1
primarily funded by the state general fund or related funds.2
(3) If the cost of any state program or function and the ongoing 3
revenue necessary to fund the program or function are shifted to the 4
state general fund or a related fund on or after July 1, 2026, from 5
another source of funding, the economic and revenue forecast council, 6
acting pursuant to section 1 of this act, shall increase the state 7
expenditure limit to reflect the shift. 8
(4) If by order of any court, or legislative enactment, the costs 9
of a federal or local government program are transferred to or from 10
the state, the economic and revenue forecast council, acting pursuant 11
to section 1 of this act, shall increase or decrease the state 12
expenditure limit, as the case may be, to reflect the shift.13
(5) This section does not apply to: 14
(a) A transfer of moneys to, or an expenditure from, the budget 15
stabilization account; 16
(b) A transfer of moneys to, or an expenditure from, the tax 17
relief account created in section 8 of this act; 18
(c) A transfer of moneys, or shifting of program costs, when that 19
transfer or shift impacts only the general fund or related funds and 20
that transfer or shift neither involves nor impacts any other fund 21
source; or 22
(d) A statutorily required transfer of moneys from the general 23
fund, or a related fund, to any other fund up to the amount required 24
in the version of the statute in effect on January 1, 2026.25
NEW SECTION. Sec. 3. A new section is added to chapter 43.135 26
RCW to read as follows: 27
The state expenditure limit may be exceeded upon declaration of 28
an emergency for a period not to exceed 24 months by a law approved 29
by a two-thirds vote of each house of the legislature and signed by 30
the governor. The law shall set forth the nature of the emergency, 31
which is limited to natural disasters that require immediate 32
government action to alleviate human suffering and provide 33
humanitarian assistance. The state expenditure limit may be exceeded 34
for no more than 24 months following the declaration of the emergency 35
and only for the purposes contained in the emergency declaration.36
Sec. 4. RCW 43.135.025 and 2020 c 218 s 3 are each amended to 37
read as follows: 38
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(1) Each November, the economic and revenue forecast council 1
shall calculate the fiscal growth factor for each fiscal year of the 2
current biennium and the ensuing biennium. 3
(2) The definitions in this subsection apply throughout this 4
chapter unless the context clearly requires otherwise.5
(a) "Fiscal growth factor" means the average ((growth in state 6
personal income for the prior ten )) of the sum of inflation and 7
population change for each of the prior three fiscal years.8
(b) "General fund" means the state general fund.9
(c) "Inflation" means the percentage change in the consumer price 10
index for all urban consumers for the Seattle-Tacoma-Bellevue area, 11
or successor index, for each fiscal year as published by the federal 12
bureau of labor statistics.13
(d) "Population change" means the percentage change in state 14
population for each fiscal year as reported by the office of 15
financial management.16
(e) "Related funds" means the Washington opportunity pathways 17
account, the workforce education investment account, the fair start 18
for kids account, and the education legacy trust account.19
Sec. 5. RCW 43.88.290 and 1981 c 270 s 13 are each amended to 20
read as follows: 21
No state officer or employee shall intentionally or negligently: 22
Over-expend or over-encumber any appropriation made by law; fail to 23
properly account for any expenditures by fund, program, or fiscal 24
period; exceed the state expenditure limit; or expend funds contrary 25
to the terms, limits, or conditions of any appropriation made by law.26
Sec. 6. RCW 82.32.385 and 2025 c 418 s 1 are each amended to 27
read as follows: 28
(1)(a) Beginning September 2023 and ending June 2025, by the last 29
day of September, December, March, and June of each year, the state 30
treasurer must transfer from the general fund to the connecting 31
Washington account created in RCW 46.68.395 $13,987,000.32
(b) For fiscal year 2026, the state treasurer must transfer from 33
the multimodal transportation account created in RCW 47.66.070 to the 34
general fund $111,896,000 in four equal quarterly transfers.35
(2) Beginning September 2025 and ending June 2027, by the last 36
day of September, December, March, and June of each year, the state 37
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treasurer must transfer from the general fund to the connecting 1
Washington account created in RCW 46.68.395 $11,658,000.2
(3) Beginning September 2027 and ending June 2029, by the last 3
day of September, December, March, and June of each year, the state 4
treasurer must transfer from the general fund to the connecting 5
Washington account created in RCW 46.68.395 $7,564,000.6
(4) Beginning September 2029 and ending June 2031, by the last 7
day of September, December, March, and June of each year, the state 8
treasurer must transfer from the general fund to the connecting 9
Washington account created in RCW 46.68.395 $4,056,000.10
(5) For fiscal year 2026 through fiscal year 2038, the state 11
treasurer must transfer from the general fund to the move ahead WA 12
flexible account created in RCW 46.68.520 $31,000,000 each fiscal 13
year in four equal quarterly transfers. This amount represents the 14
estimated state sales and use tax generated from new transportation 15
projects and activities funded as a result of chapter 182, Laws of 16
2022. 17
(6)(a) For fiscal year 2024, fiscal year 2025, and fiscal year 18
2028 through fiscal year 2038, the state treasurer must transfer from 19
the general fund to the move ahead WA flexible account created in RCW 20
46.68.520 $57,000,000 each fiscal year in four equal quarterly 21
transfers. 22
(b) For fiscal year 2026, the state treasurer must transfer from 23
the multimodal transportation account created in RCW 47.66.070 to the 24
general fund $114,000,000 in four equal quarterly transfers.25
(7) For fiscal year 2028 and fiscal year 2029, the state 26
treasurer must transfer from the general fund to the multimodal 27
transportation account created in RCW 47.66.070 $304,691,000 each 28
fiscal year in four equal quarterly transfers. 29
(8) Transfers in this section do not constitute a money transfer 30
pursuant to section 2 of this act.31
Sec. 7. RCW 43.88.030 and 2025 c 414 s 8034 are each amended to 32
read as follows: 33
(1) The director of financial management shall provide all 34
agencies with a complete set of instructions for submitting biennial 35
budget requests to the director at least three months before agency 36
budget documents are due into the office of financial management. The 37
budget document or documents shall consist of the governor's budget 38
message which shall be explanatory of the budget and shall contain an 39
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outline of the proposed financial policies of the state for the 1
ensuing fiscal period, as well as an outline of the proposed six-year 2
financial policies where applicable, and shall describe in connection 3
therewith the important features of the budget. The biennial budget 4
document or documents shall also describe performance indicators that 5
demonstrate measurable progress towards priority results. The message 6
shall set forth the reasons for salient changes from the previous 7
fiscal period in expenditure and revenue items and shall explain any 8
major changes in financial policy. Attached to the budget message 9
shall be such supporting schedules, exhibits and other explanatory 10
material in respect to both current operations and capital 11
improvements as the governor shall deem to be useful to the 12
legislature. The budget document or documents shall set forth a 13
proposal for expenditures in the ensuing fiscal period, or six-year 14
period where applicable, based upon the estimated revenues and 15
caseloads as approved by the economic and revenue forecast council 16
and caseload forecast council or upon the estimated revenues and 17
caseloads of the office of financial management for those funds, 18
accounts, sources, and programs for which the forecast councils do 19
not prepare an official forecast. Revenues shall be estimated for 20
such fiscal period from the source and at the rates existing by law 21
at the time of submission of the budget document, including the 22
supplemental budgets submitted in the even-numbered years of a 23
biennium. However, the estimated revenues and caseloads for use in 24
the governor's budget document may be adjusted to reflect budgetary 25
revenue transfers and revenue and caseload estimates dependent upon 26
budgetary assumptions of enrollments, workloads, and caseloads. All 27
adjustments to the approved estimated revenues and caseloads must be 28
set forth in the budget document. The governor may additionally 29
submit, as an appendix to each supplemental, biennial, or six-year 30
agency budget or to the budget document or documents, a proposal for 31
expenditures in the ensuing fiscal period from revenue sources 32
derived from proposed changes in existing statutes.33
The budget document or documents shall also contain:34
(a) Revenues classified by fund and source for the immediately 35
past fiscal period, those received or anticipated for the current 36
fiscal period, and those anticipated for the ensuing biennium;37
(b) The undesignated fund balance or deficit, by fund;38
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(c) Such additional information dealing with expenditures, 1
revenues, workload, performance, and personnel as the legislature may 2
direct by law or concurrent resolution; 3
(d) Such additional information dealing with revenues and 4
expenditures as the governor shall deem pertinent and useful to the 5
legislature; 6
(e) Tabulations showing expenditures classified by fund, 7
function, and agency; 8
(f) The expenditures that include nonbudgeted, nonappropriated 9
accounts outside the state treasury; 10
(g) Identification of all proposed direct expenditures to 11
implement the Puget Sound water quality plan under chapter 90.71 RCW, 12
shown by agency and in total; and 13
(h) Tabulations showing each postretirement adjustment by 14
retirement system established after fiscal year 1991, to include, but 15
not be limited to, estimated total payments made to the end of the 16
previous biennial period, estimated payments for the present 17
biennium, and estimated payments for the ensuing biennium.18
(2) The budget document or documents shall include detailed 19
estimates of all anticipated revenues applicable to proposed 20
operating or capital expenditures and shall also include all proposed 21
operating or capital expenditures. The total of beginning 22
undesignated fund balance and estimated revenues less working capital 23
and other reserves shall equal or exceed the total of proposed 24
applicable expenditures. The budget document or documents shall 25
further include: 26
(a) Interest, amortization and redemption charges on the state 27
debt; 28
(b) Payments of all reliefs, judgments, and claims;29
(c) Other statutory expenditures; 30
(d) Expenditures incident to the operation for each agency;31
(e) Revenues derived from agency operations; 32
(f) Expenditures and revenues shall be given in comparative form 33
showing those incurred or received for the immediately past fiscal 34
period and those anticipated for the current biennium and next 35
ensuing biennium; 36
(g) A showing and explanation of amounts of general fund and 37
other funds obligations for debt service and any transfers of moneys 38
that otherwise would have been available for appropriation;39
(h) Common school expenditures on a fiscal-year basis;40
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(i) A showing, by agency, of the value and purpose of financing 1
contracts for the lease/purchase or acquisition of personal or real 2
property for the current and ensuing fiscal periods; and3
(j) A showing and explanation of anticipated amounts of general 4
fund and other funds required to amortize the unfunded actuarial 5
accrued liability of the retirement system specified under chapter 6
41.45 RCW, and the contributions to meet such amortization, stated in 7
total dollars and as a level percentage of total compensation.8
(3) The governor's operating budget document or documents shall 9
reflect the statewide priorities as required by RCW 43.88.090.10
(4) The governor's operating budget document or documents shall 11
identify activities that are not addressing the statewide priorities.12
(5)(a) Beginning in the 2021-2023 fiscal biennium, the governor's 13
operating budget document or documents submitted to the legislature 14
must leave, in total, a positive ending fund balance in the general 15
fund and related funds. 16
(b) Beginning in the 2021-2023 fiscal biennium, the projected 17
maintenance level of the governor's operating budget document or 18
documents submitted to the legislature must not exceed the available 19
fiscal resources for the next ensuing fiscal biennium.20
(c) For purposes of this subsection: 21
(i) "Available fiscal resources" means the beginning general fund 22
and related funds balances and any fiscal resources estimated for the 23
general fund and related funds, adjusted for proposed revenue 24
legislation, and with forecasted revenues adjusted to the greater of 25
(A) the official general fund and related funds revenue forecast for 26
the ensuing biennium, or (B) the official general fund and related 27
funds forecast for the second fiscal year of the current fiscal 28
biennium, increased by 4.5 percent for each fiscal year of the 29
ensuing biennium. 30
(ii) "Projected maintenance level" means estimated appropriations 31
necessary to maintain the continuing costs of program and service 32
levels either funded in the governor's budget document or documents 33
submitted to the legislature or mandated by other state or federal 34
law, adjusted by the estimated cost of proposed executive branch 35
legislation, and the amount of any general fund moneys projected to 36
be transferred to the budget stabilization account pursuant to 37
Article VII, section 12 of the state Constitution. Proposed executive 38
branch legislation does not include proposals by institutions of 39
higher education, other separately elected officials, or other 40
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boards, commissions, and offices not under the authority of the 1
governor that are not funded or assumed in the governor's budget 2
document or documents submitted to the legislature.3
(iii) "Related funds" has the meaning defined in RCW 43.88.055.4
(d) (b) of this subsection (5) does not apply: 5
(i) To any governor-proposed legislation submitted to the 6
legislature that makes net reductions in general fund and related 7
funds appropriations to prevent the governor from making across-the-8
board reductions in allotments for these particular funds as provided 9
in RCW 43.88.110(10); or 10
(ii) In a fiscal biennium for which the governor proposes 11
appropriations from the budget stabilization account pursuant to 12
Article VII, section 12(d)(ii) of the state Constitution.13
(6) Beginning in the 2027-2029 fiscal biennium, the governor's 14
operating budget document or documents submitted to the legislature 15
must reflect the state expenditure limit established under chapter 16
43.135 RCW and must not propose expenditures in excess of that limit.17
(7) A separate capital budget document or schedule shall be 18
submitted that will contain the following: 19
(a) A statement setting forth a long-range facilities plan for 20
the state that identifies and includes the highest priority needs 21
within affordable spending levels; 22
(b) A capital program consisting of proposed capital projects for 23
the next biennium and the two biennia succeeding the next biennium 24
consistent with the long-range facilities plan. Insomuch as is 25
practical, and recognizing emergent needs, the capital program shall 26
reflect the priorities, projects, and spending levels proposed in 27
previously submitted capital budget documents in order to provide a 28
reliable long-range planning tool for the legislature and state 29
agencies; 30
(c) A capital plan consisting of proposed capital spending for at 31
least four biennia succeeding the next biennium; 32
(d) A strategic plan for reducing backlogs of maintenance and 33
repair projects. The plan shall include a prioritized list of 34
specific facility deficiencies and capital projects to address the 35
deficiencies for each agency, cost estimates for each project, a 36
schedule for completing projects over a reasonable period of time, 37
and identification of normal maintenance activities to reduce future 38
backlogs; 39
(e) A statement of the reason or purpose for a project;40
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(f) Verification that a project is consistent with the provisions 1
set forth in chapter 36.70A RCW; 2
(g) A statement about the proposed site, size, and estimated life 3
of the project, if applicable; 4
(h) Estimated total project cost; 5
(i) For major projects valued over five million dollars, 6
estimated costs for the following project components: Acquisition, 7
consultant services, construction, equipment, project management, and 8
other costs included as part of the project. Project component costs 9
shall be displayed in a standard format defined by the office of 10
financial management to allow comparisons between projects;11
(j) Estimated total project cost for each phase of the project as 12
defined by the office of financial management; 13
(k) Estimated ensuing biennium costs; 14
(l) Estimated costs beyond the ensuing biennium;15
(m) Estimated construction start and completion dates;16
(n) Source and type of funds proposed; 17
(o) Estimated ongoing operating budget costs or savings resulting 18
from the project, including staffing and maintenance costs;19
(p) For any capital appropriation requested for a state agency 20
for the acquisition of land or the capital improvement of land in 21
which the primary purpose of the acquisition or improvement is 22
recreation or wildlife habitat conservation, the capital budget 23
document, or an omnibus list of recreation and habitat acquisitions 24
provided with the governor's budget document, shall identify the 25
projected costs of operation and maintenance for at least the two 26
biennia succeeding the next biennium. Omnibus lists of habitat and 27
recreation land acquisitions shall include individual project cost 28
estimates for operation and maintenance as well as a total for all 29
state projects included in the list. The document shall identify the 30
source of funds from which the operation and maintenance costs are 31
proposed to be funded; 32
(q) For any capital budget request for funding in the 2025-2027 33
or 2027-2029 fiscal biennia for which the project cost is 34
substantially increased, a statement detailing the amount and reason 35
for the additional cost. If the increased cost is the result of a 36
change in design, the agency must also submit a construction cost 37
estimate for the design as originally submitted. For purposes of this 38
subsection (((6))) (7)(q), "substantially increased" means total 39
estimated project costs are more than 15 percent above those listed 40
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in the prior agency budget request and for which the legislature 1
relied in making a funding decision for design or construction, 2
adjusted for C-100 inflation factors; 3
(r) Such other information bearing upon capital projects as the 4
governor deems to be useful; 5
(s) Standard terms, including a standard and uniform definition 6
of normal maintenance, for all capital projects; and7
(t) Such other information as the legislature may direct by law 8
or concurrent resolution. 9
For purposes of this subsection (((6))) (7), the term "capital 10
project" shall be defined subsequent to the analysis, findings, and 11
recommendations of a joint committee comprised of representatives 12
from the house capital appropriations committee, senate ways and 13
means committee, legislative evaluation and accountability program 14
committee, and office of financial management. 15
(((7))) (8) No change affecting the comparability of agency or 16
program information relating to expenditures, revenues, workload, 17
performance and personnel shall be made in the format of any budget 18
document or report presented to the legislature under this section or 19
RCW 43.88.160(1) relative to the format of the budget document or 20
report which was presented to the previous regular session of the 21
legislature during an odd-numbered year without prior legislative 22
concurrence. Prior legislative concurrence shall consist of (a) a 23
favorable majority vote on the proposal by the standing committees on 24
ways and means of both houses if the legislature is in session or (b) 25
a favorable majority vote on the proposal by members of the 26
legislative evaluation and accountability program committee if the 27
legislature is not in session. 28
NEW SECTION. Sec. 8. A new section is added to chapter 43.79 29
RCW to read as follows: 30
(1) The tax relief account is created in the state treasury. On 31
June 30th of each fiscal year, the state treasurer shall deposit in 32
the tax relief account all state general fund and related account 33
revenues amounts in excess of the state expenditure limit for that 34
fiscal year. In calculating the transfer, the treasurer must first 35
subtract any transfers from the state general fund to the budget 36
stabilization account pursuant to Article VII, section 12 of the 37
state Constitution. In the event a transfer is required, the transfer 38
amount must come solely from the state general fund.39
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(2) The legislature may appropriate funds from the tax relief 1
account solely to reduce the tax burden borne by those living or 2
doing business in the state of Washington. The legislature may reduce 3
taxes through repeals, tax holidays, reductions to tax rates, tax 4
credits, or any other mechanism authorized by law so long as the 5
relief is broadly based. 6
(3) Moneys in the account may not be transferred to any other 7
account nor used for any purpose other than tax relief.8
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