
March 24, 2025 Budgets and revenue proposals released Last week’s release of the most recent state revenue forecast marked the start of the Legislature’s official budget proposal process. The forecast is down nearly $900 million over the next four years. Given these revenue challenges, the state budgets will include significant cost reductions in addition to new revenue sources. Late last week, both the Senate and the House Democrats released their respective proposals. Both include AWC’s priority to revise the property tax cap from the current 1% to something tied to inflation and population growth. We are excited to see these proposals as part of the overall package. And the Legislature is still prioritizing public safety funding in the form of HB 2015 to provide new local revenue authority and more state funding. Other budget news is less positive, with deep impacts on programs important to cities. The House and Senate will hold public hearings on their budget proposals on Tuesday, March 25. We encourage city officials to contact your legislators and share your support for the changes to the property tax cap. It is also important to highlight the importance of preserving the Public Works Assistance Account and other programs critical to cities. In addition, many other bills continue to advance through the process in advance of next week’s policy cut-off deadline on April 2. You can use our Bill Hot Sheet to see where some of the key bills are at. Happy reading, Candice Bock Government Relations Director AWC legislative priority to lift the property tax cap gets new bills One big moment we have been waiting for has arrived via SB 5798 and HB 2049. These AWC-supported proposals allow for an increase to the annual property tax cap to better match population growth and inflation. We expect this issue to quickly heat up in the Legislature, media, and public so act early to check out the bills, read our resources, and contact your legislators to show your support. SB 5798 requires a local government to legislatively declare that its broadly defined public safety needs outpace the available resources for those purposes. However, any new funds generated are still expendable as general fund revenues. More HB 2049 takes a slightly different approach, tying the property cap revision more closely with inflation and population growth, similar to HB 1334. Unlike the Senate version, HB 2049 introduces a cap not to exceed 3%. More Budget season kicks off with revenue packages and state budget proposals impacting city budget priorities The Legislature has tough budget decisions ahead as it releases revenue packages and budget proposals, which means city budget priorities are at risk. In a flurry of new bills, the Senate released a revenue package on March 20 that includes new state revenues and some tax relief, and the House released its revenue package for new state revenues on March 21. Both packages include different versions of AWC’s priority to change the property tax cap. Watch for more details in CityVoice on the state budget proposals introduced on March 24 and scheduled for hearings March 25. More Senate committee to hear on AWC priority public safety funding bill HB 2015 establishes a set of new funding pathways for public safety hiring and training. Tuesday, March 25, is a significant opportunity for cities to weigh in during a Senate committee hearing to help shape the legislation as it moves forward. AWC supports this bill as a pathway to address cities’ longstanding need for expanded sustainable public safety funding, and we are working with stakeholders to clarify provisions in the bill and to make this funding accessible to as many cities as it intends. Read more about the bill and sign in as “pro” to voice your support. Act now: Oppose diversions from the Public Works Assistance Account As AWC has been warning for months, state budget writers have proposed new sweeps of the Public Works Assistance Account (PWAA). The House operating budget diverts $288 million from the account in FY 2026; while the Senate operating budget takes $165 million in FY 2026 (which it would transfer back to the PWAA in FY 2027). Cities strongly oppose both proposed sweeps. Don’t wait—contact your legislators to urge them to oppose the diversions. Show them how important the PWAA is to your city or town with examples of current and planned projects, especially those with implications for public health, safety, affordable housing, or economic growth. Let them know the need for funding is only growing: needs assessments for Washington’s water, wastewater, and solid waste systems total more than $31 billion over the next 20 years. Given the uncertainty surrounding the federal government, the PWAA may be one of the few tools available to cities to fund critical infrastructure projects. Find more talking points and call your legislators now. Sign in as opposed to AI bargaining bill at hearing this week HB 1622, which requires cities to bargain with unions over decisions to adopt artificial intelligence (AI) tools, is up for a hearing in the Senate Labor & Commerce Committee on Friday, March 28. Cities need to contact their legislators and sign up to go on the record against the bill. The bill undermines city leaders’ rights to make business decisions about their city, could delay or prevent the adoption of cost-saving technology tools, and will likely wind up costing cities more time and money. Find more talking points and information on signing up for the hearing. Public safety and revenue updates Following the house of origin cutoff, AWC Director of Government Relations Candice Bock and General Counsel Sheila Gall look at which bills are still making their way through the Washington State Legislature. Bock and Gall cover HB 2015 and SB 5775, which address public safety funding. They also discuss the Washington state revenue forecast, with an additional decrease of $900 million that will add to projected budget shortfall of $12-$15 billion, and look at legislative proposals designed to close that gap, including revising the 1% property tax cap to account for inflation and population growth. Listen here. Want the latest on all the legislative action? Join AWC’s City Action Call this Friday (city members only) During the legislative session, AWC hosts City Actions Calls every Friday at 12:30 pm. In these meetings, AWC lobbyists provide legislative updates and city officials have the opportunity to ask questions and provide feedback. The calls occur every Friday during the legislative session. You now can register once for all sessions. Visit AWC’s bill tracker for easy access to the bills you’re most interested in and to filter by the information you’re looking for, whether it’s a brief description of a bill, the status of bills you’re tracking, or AWC’s comprehensive coverage. Tip: Don't forget to bookmark the tracker and check it regularly for the latest updates. This week’s bill highlights: Affordable housing A simple solution to preserve the intent of the Housing Accountability Act (SB 5148) More Parking bill is amended but concerns remain (SB 5184) More Budget & finance Senate revenue package includes: Property tax cap lift (SB 5798) More Reduction to the state sales tax from 6.5% to 6% (SB 5795) Wealth tax on of $10/1000 on investments over $50 million (SB 5797) Repeal of state B&O tax exemptions (SB 5794) Payroll tax of 5% on large employers (SB 5796) Read about these proposals here House revenue package includes: Property tax cap lift (HB 2049) More Wealth tax on of $8/1000 on investments over $50 million (HB 2046) Increase of state B&O tax surcharges on high-income businesses and financial institutions (HB 2045) Read about these proposals here Cannabis Social equity cannabis business siting moves across chambers (SB 5758) More HR & labor relations PFML job protections getting attention in the Senate Labor & Commerce Committee (HB 1213) More Personnel records bill slated for hearing in the Senate (HB 1308) More Bill to recognize two Islamic holidays continues path through the Legislature (SB 5106) More Land use & planning Childcare occupancy bill intends to open more space in churches (SB 5655) More A bill with a simple cause—ending diaper rash (HB 1562) More Public safety & criminal justice Concerning bill to circumvent prosecutors is gaining momentum (HB 1113) More Sign in to show support for bill on mandatory community custody after gun offenses (SB 5268) More Court competency evaluation changes bill to receive public input before Senate committee (HB 1218) More Public works & infrastructure Problematic “dig law” provision allows multiple excavators on a single notice (SB 5627) More Transportation Cities may soon see increase to relocation assistance payments cap (HB 1733) More City transportation plans may need to begin issuing tribal impact assessments (SB 5374) More Small City Connectors: Bringing city leaders together April 3 \| Raymond May 29 \| Dayton May 30 \| Chewelah June 11 \| Granger Small cities and towns face unique challenges as they work to provide essential services and programs to their residents. AWC’s Small City Connectors offer city and town leaders and staff a valuable opportunity to connect over a meal, share experiences, and exchange insights on serving their communities effectively. AWC staff will provide program updates, share resources for small cities, and answer questions from attendees. Register today! City priorities may face increased risk given the latest state revenue forecast, which shows lower projected revenues than previously expected. The revised forecast adds $900 million to the $12-15 billion budget gap already predicted for the next four years. More Explore WSDOT’s new online electric vehicle (EV) mapping tool to support planning activities for EV charging equipment and infrastructure in Washington. More Cities by the numbers Cities are where most Washingtonians live and where the state’s economy thrives. Read this fact sheet to find and share specific data points about the notable benefits that cities provide the state. This sort of data emphasizes the importance of cities to Washington and what a powerful investment it is for the state to partner with Washington’s 281 cities and towns.
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