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Washington’s budget basics
According to the National Association of State Budget Officers (NASBO), Washington’s total expenditures in fiscal year (FY) 2021 were $61.8 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2021 were $2.7 trillion, ranging from $4.7 billion in Wyoming to $512.8 billion in California.
Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.
Per the US Census Bureau, Washington’s combined state and local direct general expenditures were $82.2 billion in FY 2019 (the most recent year census data were available), or $10,798 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $10,161.
Washington’s largest spending areas per capita were elementary and secondary education ($2,599) and public welfare ($1,669). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.
Washington’s combined state and local general revenues were $86.3 billion in FY 2019, or $11,330 per capita. National per capita general revenues were $10,563. Washington does not levy an individual income tax or corporate income tax but does have a gross receipts tax. (Census counts this revenue as either general sales tax revenue or selective sales tax revenue.) Washington’s largest sources of per capita revenue were general sales taxes ($2,845) and charges ($2,418), such as state university tuition and highway tolls.
Governor Jay Inslee, a Democrat, was elected in 2020 with 57 percent of the vote. The next gubernatorial election is in 2024.
Democrats control both the House of Representatives (57 Democrats to 41 Republicans) and Senate (29 Democrats to 19 Republicans). Control of the governor’s mansion and each house of the legislature gives Democrats a trifecta in Washington. All Washington House seats are on the ballot in 2022 because representatives serve two-year terms. Senators serve four-year terms; roughly half the senatorial seats are on the ballot in 2022, and the other half will be up for election in 2024.
Washington’s budget institutions, rules, and constraints
Washington uses a biennial budget. The legislature must pass a balanced budget, but it can carry a deficit over into the following year. Washington further limits spending growth with a budget rule based on inflation and population growth. The rule is binding and requires a legislative supermajority to override it. Washington also limits total authorized debt incurred by the state but does not limit debt service.
(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)
Washington’s current budget
Governor Inslee released his FY 2023 supplemental budget proposal (the state uses a biennial budget) and gave his state of the state address in January 2022. (the state uses a biennial budget) and gave his state of the state address in January 2022.
Washington enacted its FY 2022-2023 biennial budget in May 2021. The enacted budget included $59.2 billion for general fund spending and $122.7 billion in total spending over the two-year period. In April 2021, Washington created an earned income tax credit (EITC), becoming the first state without an individual income tax to enact an EITC. in May 2021. The enacted budget included $59.2 billion for general fund spending and $122.7 billion in total spending over the two-year period. In April 2021, Washington created an earned income tax credit (EITC), becoming the first state without an individual income tax to enact an EITC.
Under the American Rescue Plan, Washington will receive $4.4 billion in direct state fiscal aid and $2.2 billion in local government aid from the federal government. As of January 2022, Washington had spent part of its ARP funds on revenue replacement, refilling its unemployment insurance trust fund, and capital construction.
According to NASBO, Washington’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:
FY 2021: $26.4 billion/$61.8 billion
FY 2020: $24.0 billion/$54.3 billion
FY 2019: $22.9 billion/$50.5 billion
For more on Washington’s budget, see
Washington’s economic trends
Washington’s per capita income (per the Bureau of Economic Analysis) was $71,889 in 2021, ranking seventh among the states. It was above the national average of $63,444, but below the Far West regional average of $73,053. The state’s median household income (five-year estimate) was $77,006 in 2020, ranking ninth among the states and above the national average of $64,994. Washington’s poverty rate was 10.2 percent in 2020 (five-year estimate), below the national rate of 12.8 percent.
Although Washington’s averages tell a story about the entire state, Washington is composed of diverse localities. For example, the city of Pullman’s median household income was $32,073, and its poverty rate was 35.4 percent; the city of Sammamish’s median household income was $181,464, and its poverty rate was 3.1 percent.
Washington’s unemployment rate historically tracks the national average, and in recent years it has been among the highest in the country. (See how COVID-19 is affecting state employment and earnings data.)
Unemployment rates (like other economic indicators) often vary significantly by race and ethnicity. In Washington, the average unemployment rate in 2021 was 5.3 percent for white residents, 7 percent for Black residents, and 5.7 percent for Hispanic or Latino residents. (This is preliminary data. See the 2020 data for a more detailed breakdown of state unemployment rates by race and ethnicity.)