Yesterday, Governor Bob Ferguson signed into law the state’s 2025-27 operating, capital, and transportations budgets—just before the deadline to take action. By law, he was required to either approve the budgets, issue partial vetoes, or reject them in full no later than May 20.

The final two-year operating budget totals nearly $78 billion and is balanced through a combination of spending reductions and new revenue measures. These include increases to business taxes for various industries, an expansion of the sales tax to cover additional services, and a higher capital gains tax and estate taxes. Several business tax exemptions were also eliminated. While Gov. Ferguson did veto a number of sections in the budget, the resulting savings of about $25 million represents a small portion of the overall budget.

In addition to the operating budget, Gov. Ferguson signed the capital budget totaling more than $7 billion and the transportation budget totaling just over $15 billion. The transportation budget is funded in part by a gas tax increase that takes effect July 1.

In recent weeks, the Governor has also signed hundreds of bills into law, including several that were requested by the UW or UW Medicine, such as:

• Senate Bill (SB) 5239 concerns retention of hospital medical records.
• SB 5355 improves safety at institutions of higher education while supporting student survivors of sexual assault.
• House Bill (HB) 1755 exempts elective percutaneous coronary intervention performed in certain hospitals owned or operated by a state entity from certificate of need requirements.
• HB 1552 extends the fee on real estate broker licenses to fund the Washington center for real estate research and adjusts the fee to account for inflation.

For more information about this legislative session and the budget outcomes, see the session review posted in the News & Updates section of this website.

Questions?

The Office of State Relations was in Olympia every day throughout session advocating on behalf of the UW. For questions about the state legislative process or the UW’s advocacy efforts, please contact Morgan Hickel at mhickel@uw.edu.

The 2025 legislative session adjourned on time yesterday following the passage of the state’s 2025-27 operating, capital, and transportation budgets. Washington state operates on a two-year budget cycle, with the biennial budgets adopted during long 105-day sessions held in odd-numbered years.

This year, the state faced a significant operating budget deficit due to lower-than-expected tax collections and increased caseloads for state programs and agencies. To close the gap, legislators adopted a final compromise budget that includes a combination of new revenue and spending reductions.

The transportation budget also faced a shortfall, which was addressed through a bipartisan revenue package.

With session now concluded, the budgets have been sent to the Governor, who may sign them into law, veto them in full, or issue partial vetoes.

Operating Budget

For the UW, the final operating budget is an overall improvement compared to the earlier proposals from the House and Senate, but it still includes some difficult reductions. Like nearly all state agencies and programs, the UW will bear some of the burden during this difficult fiscal period.

The budget includes a 1.5% across-the-board reduction to UW’s base funding—an amount that splits the difference between the 2% cut proposed by the House and the 1% cut from the Senate. It also reduces the state’s share of the UW’s “fund split,” which is the mix of state funding and tuition used for employee compensation and central services. These reductions applied to all of the state’s public four-year and two-year higher education institutions. Fund splits still vary by institution.

Notably, the final budget does not include state employee furloughs or other cost-saving measures that had been in the House and Senate proposals. These omissions helped avoid deeper cuts to the UW’s overall budget.

However, most of the University’s legislative priorities were not funded. Given the state’s budget constraints, lawmakers had little appetite for supporting new initiatives or funding requests.

Regarding the Washington College Grant, the state’s flagship financial aid program, maximum awards will be provided to students attending public institutions with family incomes up to 60% of the state median family income (MFI). Preserving this commitment helps maintain access to the UW for Washington students.

Capital Budget

The 2025-27 capital budget includes a number of UW-related investments:

• $124M for the the construction of chemical sciences facilities and modernization of Bagley Hall on the Seattle campus. This was the UW’s top capital request.
• $3.9M (UW Building Account) for Phase 3 of UW Tacoma’s power infrastructure repairs.
• $1.7M for improvements to the UW’s soccer practice fields ahead of the 2026 FIFA World Cup.
• $8.05M via the Department of Commerce for the UW Sunbreak Tower affordable housing project.
• $3.25M via the Department of Commerce for the UW Medicine Airlift Northwest hangar in Chelan.

However, the budget does not include funding for decarbonization projects on the Seattle campus. The University requested funding from the Climate Commitment Account (CCA) for the first 10 projects outlined in its five-part energy decarbonization strategy. Due to limited CCA funds, lawmakers generally prioritized completing existing state projects rather than funding new ones.

Transportation Budget

The UW typically has more limited engagement with the transportation budget but this year, requested accelerated funding for access, safety, and efficiency improvements to the Burke-Gilman Trail on or near the Seattle campus. The final transportation budget fulfills this request, allocating $9.4 million in 2025-27 and $6.6 million in 2027-29.

The budget also includes funding for the UW’s sidewalk inventory and accessibility mapping project, the WSDOT-UW professional civil engineering master’s degree fellowship program, a SR 520 noise reduction study, and the UW Mobility Innovation Center.

Questions?

Throughout the session, the UW Office of State Relations has advocated on behalf of the University in Olympia, working to mitigate budget reductions where possible during this very challenging budget year. For questions about the session outcomes, please contact Morgan Hickel at mhickel@uw.edu.

A detailed summary of the UW’s portion of the 2025-27 operating, capital, and transportation budgets will be available in the coming days on the UW Finance, Planning & Budgeting website here.

At a press conference yesterday, Gov. Bob Ferguson responded to the recently released operating budget proposals from both the House and Senate. He stated from the outset that neither proposal is one he could sign, citing an overreliance on new taxes—particularly a proposed wealth tax.

While the proposals include several new revenue streams aimed to addressing the state’s multibillion-dollar budget shortfall, Ferguson singled out the wealth tax as problematic. He described it as “novel, untested, difficult to implement, and most importantly for purposes of adopting a sustainable budget, will face immediate challenges in court.” His remarks effectively remove a broad wealth tax from consideration for inclusion in the state’s final 2025-27 operating budget.

Washington’s budget process begins with the House and Senate releasing separate proposals. Lawmakers then work together to reconcile the differences and craft a compromise budget. Once approved in both chambers, the compromise budget is sent to the Governor, who can sign it, veto it entirely, or issue partial vetoes. During his press conference, Ferguson emphasized that the legislature will need to pivot in order to secure his signature.

Despite his concerns, Ferguson expressed appreciation for elements of both budgets, specifically praising the inclusion of additional savings and reductions. He acknowledged the hard work of the House and Senate budget writers and noted that productive budget conversations are ongoing.

The legislature will continue working toward a final compromise budget, which must be approved by both the House and Senate by the end of the legislative session on April 27.

Questions?

The UW Office of State Relations is in Olympia every day throughout session. For questions about the legislative process or the UW’s advocacy efforts, please contact Morgan Hickel at mhickel@uw.edu.

Yesterday, the House and Senate unveiled their bipartisan capital budget proposals, which include full funding for the UW’s top priority: the construction and modernization of chemical sciences facilities in Seattle. Updating current facilities, originally built in 1937 and 1957, will help meet student demand, increase degree production, better support cutting-edge research, and foster innovation.

In addition, the House proposal includes funding for decarbonization efforts on the Seattle campus. The UW has developed a comprehensive five-part strategy to guide campus decarbonization and is ready to begin implementing it. This funding will also help the UW work toward meeting the targets set forth in the state’s Climate Commitment Act and Clean Building Performance Standards. While the funding provided does not cover the entire request, it allows the UW to begin work. The Senate proposal, however, does not include this appropriation, so the UW Office for State Relations is advocating for its inclusion in the final compromise budget.

Overall, both budget proposals are positive for the UW. The House and Senate will now work together on the compromise budget, which must pass both chambers by the end of session on April 27.

For a more in-depth overview of the capital budget proposals, see UW Finance, Planning & Budgeting’s briefs page. Details about the operating budget proposals can be found here.

Questions?

The UW Office of State Relations is in Olympia advocating on behalf of the University. For questions about the capital budget proposals or the legislative process, please contact Morgan Hickel at mhickel@uw.edu.