Session Preview

The 105-day legislation session and first half of the biennial budget cycle begins today, Monday January 13, 2025. The legislature will pass the state’s Operating, Capital, and Transportation budgets for the next two years. The legislature must pass a balanced budget before it adjourns, which is currently scheduled for April 27.

The legislature’s biggest issue this session is the budget deficit, estimated at between $12 billion to $15 billion over the next four years. In response to this we expect several tax proposals to be introduced including a new state-wide payroll tax, wealth tax, and increases on Business & Occupation (B&O) taxes. Before the new year, outgoing Gov. Jay Inslee released his Operating, Capital, and Transportation budget proposals for the 2025-2027 biennium. His proposal estimated a budget shortfall of approximately $12.6 billion over four years with a proposed $7.5 billion (10.4%) increase in spending. This was funded by a wealth tax of 1% for families worth more than $100 million and a 20% B&O tax increase on service-related businesses with revenues of over $1 million annually. You can read more about Inslee’s proposal here.

The Democratic party has increased its majorities by gaining one seat in both the House and Senate in the 2024 midterm elections. Democrats will now control the Senate 30-19 and the House 59-39. In total there are 25 new members this session and eight former House members moving over to the Senate.

Governor-Elect Ferguson recently released his budget priorities. New investments in the Governor-elect’s budget include funding for local law enforcement, ferries, housing, and affordability measures. His proposal includes budget savings of $4 billion over the four-year budget period by evaluating state agency spending and making reductions equivalent to approximately 6% of operational expenditures.

Key Highlights Heading Into Session

Leadership and Committee structure:

Bill introductions: Legislators started pre-filing bills in December. Click here for an updated list of pre-filed bills.

  • House Bill 1155, sponsored by Rep. Liz Berry, seeks to prohibit non-competition covenants and clarify non-solicitation agreements in Washington state to foster competition and economic growth. The bill is scheduled for a hearing in the House Labor & Workplace Standards Committee on Wednesday, January 15 at 8:00 a.m..
  • House Bill 1168, sponsored by Rep. Clyde Shavers, mandates that developers of generative AI systems disclose detailed information about the datasets used to train these systems with the intent to enhance transparency Requirements would include, high-level summaries of the data sources, purposes, and any modifications, with certain exemptions for security and national defense-related AI systems. The bill would be enforced by the attorney general, who can impose penalties for non-compliance.
  • House Bill 1170, sponsored by Rep. Shavers, mandates that AI providers with significant user bases implement disclosure and detection tools for AI-generated content in Washington state. The bill defines requirements for AI detection tools and disclosure mechanisms to inform users about AI-generated content while exempting certain entertainment products. Violations are considered unfair practices under the consumer protection act.
  • Marko Liias introduced SB 5161, which proposes the adoption of the transportation budget for the 2025-2027 biennium in Washington state, focusing on infrastructure improvements, safety, and sustainability initiatives. The bill allocates funds to various state agencies and programs, emphasizing projects that enhance safety, reduce carbon emissions, and support infrastructure improvements. It is scheduled for a hearing in the Senate Transportation Committee on Tuesday, January 14 at 4:00 p.m..
  • The Washington Fashion Sustainability Accountability Act, HB 1107, sponsored by Rep. Sharlett Mena, mandates environmental impact disclosures from large fashion producers to mitigate the environmental impacts of the fashion industry. The bill is scheduled for a hearing in the House Environment & Energy Committee today.
  • Senate Bill 5070, sponsored by Sen. Rebecca Saldaña, proposes to prohibit interchange fees on tips and taxes in electronic payment transactions. The bill aims to protect tipped wages for employees and reduce financial burdens on employers by ensuring that interchange fees are not applied to tax or gratuity amounts. Additionally, it includes provisions for civil penalties for violations and data privacy restrictions and requires payment card networks to implement mechanisms to handle tax or gratuity data by 2026.

Key Issues Before the Legislature in 2025

Helpful Links for Session:

Important Session Dates:

  • Feb. 21, 2025: House of Origin Policy Cutoff
  • Feb. 28, 2025: House of Origin Fiscal Cutoff
  • March 12, 2025: House of Origin Floor Cutoff
  • March 24, 2025: Opposite House Policy Cutoff
  • March 31, 2025: Opposite House Fiscal Cutoff
  • April 9, 2025: Opposite House Floor Cutoff
  • April 27, 2025: Last Day of Session

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