OLYMPIA… The latest quarterly state revenue forecast shows the state’s operating budget is headed into negative territory despite this year’s passage of a state-record $12.2 billion, four-year package of tax increases.

The third-quarter predictions from the state’s chief economist have revenue collections for the 2025-27 operating-budget cycle falling $412 million from June’s second-quarter forecast – which in turn was down from the year’s first forecast, in March. They also include a $13 million reduction associated with the previous budget.

The result is a projected $421 million deficit in the current budget, which took effect less than three months ago.

When combined with the $477 million drop projected for the 2027-29 budget cycle, lawmakers could easily be looking at a $1.2 billion shortfall over the state’s four-year budget outlook.

Sen. Chris Gildon, R-Puyallup, is a member of the Economic and Revenue Forecast Council, which adopted today’s forecast. He had this reaction to the latest numbers:

“The fact that the Democrats’ budget is underwater this soon shows how wrong their spending priorities are. The ‘$ave Washington’ plan proposed by Senate Republicans, which didn’t outspend the available revenue, looks better all the time. The state’s financial position would be much better today if our responsible, no-new-taxes approach had been approved; instead, the majority repeatedly rejected our plan in favor of charging ahead with all those tax and fee increases, using a wildly exaggerated budget shortfall as justification.

“I just saw a federal-level report that showed a family of four in Washington paid $5,276 more annually to state and local governments than a family in the average state – and that was based on 2023 census numbers, before the record tax increases of 2025. It shows how our Democratic colleagues seem either unable or unwilling to make life in our state affordable – they just keep making it more expensive.

“Unfortunately, the financial iceberg ahead is even larger than the new forecast indicates. That’s because Democrats completely ignored the $1 billion in costs related to lawsuits and damage claims caused by agency mismanagement, and they budgeted for just one year of the costs of ongoing information-technology projects. And there’s another public-employee pay raise still to be funded, on top of the billions of dollars they chose to put toward other pay raises that could and should be renegotiated under the circumstances.

“The majority party and the governor could call a special legislative session to put the brakes on all their new spending, and provide some relief to taxpayers, but it’s more likely they will blame this situation on the federal government and the cost of delivering core state services rather than take responsibility and correct course. The truth is, what we’re seeing is the result of ineptitude, catering to special interests and the Democrats’ ‘tax-first’ agenda. It shouldn’t be this way.”