Ferguson’s budget priorities include billions of dollars in new savings and investments in housing, public safety, ferries, and affordability

Budget priorities document available here [PDF].

OLYMPIA - Governor-elect Bob Ferguson today announced his budget priorities, including a plan to save approximately $4.4 billion.

Washington state faces a projected budget shortfall of more than $12 billion over the next four years. Given the urgency of the budget situation, Ferguson released his budget priorities ahead of taking office Jan. 15. In addition to billions of dollars in reduced spending, Ferguson calls for new investments in public safety, housing, ferries, and policies that reduce costs for families, including universal free school lunches and expanded childcare affordability for employees of small businesses. He also announced his budget principles that will help Washington achieve balanced, responsible budgets that protect Washington’s values and deliver good government to the people.

Ferguson proposes to reduce state agency spending by at least $4 billion and save an additional $300 million by resolving ongoing disputes in the tobacco master settlement. He also proposes additional savings generated by sweeping $75 million from regulatory and civil law enforcement agencies, including from the Attorney General’s Office.

The savings identified are a first step in the budgeting process. They are separate from, or in addition to, the approximately $3 billion in one-time savings and delayed investments identified in Governor Jay Inslee’s 2025-2027 proposed operating budget.

“Washingtonians expect us to govern efficiently while upholding our shared values,” Ferguson said. “I intend to tackle our biggest challenges head on. To that end, I am sharing my budget priorities ahead of the legislative session. I will be transparent about the hard choices ahead of us and how I plan to approach them. By working together as leaders, we can bring Washington through these budget challenges and come out stronger as a state.”

As part of his priorities, Ferguson released a framework for achieving reductions in state agency spending. The reductions will not impact basic education spending. In fact, one of his principles includes increasing the percentage of the budget going to support K-12 education.

The reductions also will not impact public safety agencies, including the State Patrol, Department of Corrections, and Criminal Justice Training Commission.

He will ask agencies to start with the following strategies:

• Consolidate management positions by 10-25%
• Make 10-25% reductions to administrative, executive and externally focused positions that are not essential to the delivery of government services
• Restrict equipment purchases
• Reduce agency out-of-state travel by at least 50% and reduce in-state travel by at least 25%

In addition to administrative reductions, Ferguson will ask agency leadership to work with the Office of Financial Management to evaluate and, where possible, conduct a zero-based budgeting review of certain programs, working groups and studies, starting with:

• Programs that have just launched or are not fully implemented, including pilots;
• Programs originally funded on a one-time basis using federal COVID-era dollars;
• Agency working groups and advisory committees or groups that are more than four years old and may have achieved a substantial portion of their mission;
• Small programs that serve fewer than 1,000 customers every year;
• Any program that does not track and publish performance measures; and
• Legislatively directed studies.

Governor-elect Ferguson will work with the Office of Financial Management and cabinet agencies to finalize details of his across-the-board reductions proposal and to provide his framework to legislative budget writers as they begin their work in the coming days. Ferguson will also ask legislators and state employees to use their expertise to identify opportunities for efficiency and cost savings.

New investments in public safety, housing, ferries, and affordability

Ferguson is calling for approximately $800 million in new investments of general fund dollars over the next four years on the following priorities:

• Public Safety: A $100 million per biennium grant program to increase the number of well-trained law enforcement officers in Washington state. It is not acceptable that we rank dead last in the country in law enforcement officers per capita. Ferguson also proposes $5 million to clear the backlog of approximately 15,000 cases at the Washington State Toxicology Laboratory. This backlog is delaying justice for cases across the state.
• Housing: The housing crisis is impacting families in communities in every region of the state. We must build more than 1.1 million units of housing in the next 20 years to meet the anticipated growth and start to reduce the cost of housing. The budget proposal includes $600 million in the capital budget to build more housing across the state to reduce the cost of homes for Washington families.
• Ferries: The budget priorities include support for Gov. Inslee’s proposal to invest nearly $20 million in the transportation budget to support crew recruitment and retention and increase service to island communities.
• Affordability: Ferguson proposes $480 million to guarantee universal school lunches for every Washington student. He also proposes $100 million to expand child childcare eligibility for employees at small businesses. These proposals will improve student learning, reduce costs for thousands of Washington families, and support small businesses that fuel our economy.

Budget principles

Ferguson’s priorities document provides an overview of how he will approach budget decisions as Governor. Some core principles:

• Avoid legislation that includes hidden spending hikes: Too often, legislation is structured to include low spending in the early years of implementation, with significant increases in spending hidden outside the four-year budget outlook. This undermines the spirit of four-year balanced budgeting. We must stop passing legislation that delays implementation beyond the next biennium.
• Increase the percentage of our budget spent on basic education: The Washington state constitution calls education the “paramount duty” of our state. And yet, only 41.9% of the current budget proposal is spent on K-12 schools. Washington must increase, not decrease, the portion of our budget spent on K-12 education.
• Ensure strong budget reserves: Prudent fiscal leadership means ensuring that the state has adequate budget reserves to respond in times of crisis and to weather economic uncertainty. Draining the Rainy Day fund is an unsustainable budget practice with long-term consequences. Governor-elect Ferguson is committed to protecting the Rainy Day Fund to ensure Washington has sufficient budget reserves for emergencies.
• Support state employees: State employees provide essential services that make Washington a great state to live and raise a family. Washington must support the recruitment and retention of qualified, talented state employees by funding the 32 collective bargaining agreements negotiated by the Office of Financial Management.

Ferguson on revenue

“Washingtonians expect that we will increase revenue as a last resort,” Ferguson said. “I will not start contemplating additional revenue options until we have exhausted efforts to improve efficiency.”