Last Friday, the Director of the Washington State Office of Financial Management (OFM) K.D. Chapman-See issued the 2027-29 operating, capital, and transportation budget instructions to all state agency directors, providing guidance on developing legislative priorities for the upcoming legislative session.
In the memo, Director Chapman-See sounded the alarm on the state’s financial situation and asked state agencies to brace for a significant budget shortfall in the upcoming biennial budget cycle. She said this will likely be the most challenging budget in recent years, citing contributing factors such as rising costs of key services, population growth, and federal funding cuts. In addition, she highlighted that the state will not be able to rely on revenue from the recently passed “Millionaire’s Tax” since revenue will not be collected until fiscal year 2029 and it is currently facing legal challenges.
To prepare for the challenging financial situation, Director Chapman-See made it clear that agencies cannot adopt a “business as usual” approach, and that OFM will be working with agency leaders on spending-reduction exercises and cost savings. Specifically, she said that agencies should plan to pause phase-ins of most new programs and the expansion of existing programs, while providing options to increase program efficiencies and structural reforms. The instructions also request agencies to be mindful of and consider disproportionate impacts reductions may have on underserved communities.
As a reminder, the University of Washington is a public agency and must submit operating, transportation, and capital budget requests to OFM by mid-September. These requests will form the University’s agenda for the 2027 legislative session.
Questions?
For questions about the state’s fiscal situation or UW state advocacy, please contact Morgan Hickel at mhickel@uw.edu and Kevin Chang at kchang28@uw.edu.