The proposed operating, capital, and transportation budgets for the 2025-27 biennium include reductions to several of AWC’s priorities, notably the Public Works Assistance Account (PWAA) and basic law enforcement training (BLEA) but fund other city priorities. The operating budget is $72 billion, but that reflects a $10-12 billion gap over the four-year budget outlook. To bridge the gap, the budget includes program cuts and new revenues from a new wealth tax and increases in state B&O taxes on services for companies with more than $1 million in revenues. The proposal also transfers $1 billion from the LEOFF 1 pension fund to the state general fund.

Highlights of budget impacts for cities are included below. For more information on specific programs, see the budget matrix and the article on the PWAA sweep.

Operating budget

• State shared revenues – fully funds state shared revenue distributions but does not fund AWC’s request to increase municipal criminal justice assistance to help with law enforcement retention and recruitment.
• Basic law enforcement academies (BLEA) – reduces funding for basic training from funding 33 classes to funding a total of 25 classes, including six regional academies. Reimposes a 25% cost shift back to local governments for training new recruits.
• Public defense – funds $6 million in new public defense grants to cities, in addition to funding existing $900,000 city grants, plus additional $20 million for innovative grant program for cities and counties. Funds evaluation of public defense system and state and national standards.
• Alternative response and co-responder programs – does not include ongoing grant funding for alternative response programs for local governments.
• Housing – continued investment of $1.2 billion in programs, including:
  • $200 million for covenant homeownership program.
  • $130.6 million for Housing and Essential Needs Program.
  • $111 million for emergency housing and rental assistance.
  • $76.6 million for local government grant program to transition encampments.
  • $62 million for grants to support O&M costs of permanent supportive housing.
• Homelessness funding – $53.3 million to backfill programs for loss of document recording fees.
• Pension funding – merges the 3 closed pension programs (LEOFF 1, PERS 1 and TRS 1) and shifts $1 billion in excess assets from the LEOFF 1 pension to the state general fund.

Capital budget

• PWAA – sweeps $100 million for 2025-27 and $100 million in 2027-29 in addition to other diversions. This is especially disappointing given that full funding for the program was restored last year, after a decade of raids on the program for state funding needs.
• Broadband – fully funds state match for federal Broadband Equity, Access, and Deployment grants. State contribution: $230 million. Federal allocation: $982 million.
• Housing – continued investment in the Housing Trust Fund including $428 million for housing to benefit low-income and special needs populations, including permanent supportive housing.

Transportation budget

• Transportation Improvement Board (TIB) – $293 million

When the legislative session begins on January 13, we expect to see some additional budget priorities from Governor-elect Ferguson. Then the House and Senate will begin work on their own proposals for release after the March revenue forecast and a final plan before the session adjourns in April.

Gov. Inslee’s budget proposal includes a hit to the PWAA and reductions to law enforcement training

December 18, 2024

The Governor’s last budget proposal for 2025-27 includes $2 billion in reductions including sweeping $100 million out of the Public Works Assistance Account (PWAA), with another $100 million sweep of the account in the 2027-29 biennium. The Governor’s proposed cuts are coupled with significant new revenue proposals from a new wealth tax and increases in the state’s B&O tax on services. This is due to rising expenditures that are outpacing flat revenue forecasts, resulting in a shortfall in the upcoming biennial budget cycle and the four-year budget outlook. The revenue proposals do not include the option that would also assist local governments: AWC’s priority to fix to the arbitrary 1% property tax cap.

Cities now need to rally again to protect the PWAA. This vital resource was created in the 1980s to provide low- and no-interest loans to cities, counties, and public utility districts to fund basic infrastructure. The account is a national model to fund these crucial community needs and keep costs down for residents. The PWAA was swept during the last round of state budget cuts during the Great Recession and subsequent struggles to fund education in the wake of the McCleary decision. We finally achieved the full restoration of this critical funding just in the last few years.

Tell your local legislators how critical this funding is for our cities. If the Public Works Board (PWB) has funded a project in your community, share the details with them and explain how PWAA dollars made a difference. For added help, refer to AWC’s 2025 infrastructure investment fact sheet or the PWB’s fact sheet for your legislative district. Remind your legislators that cities and towns across Washington are struggling with infrastructure needs. In the latest City Conditions Survey, 78% of responding cities reported infrastructure funding as a priority.

The proposed budget also reimposes a 25% cost shift back to cities for the cost of new recruits attending the Basic Law Enforcement Academy (BLEA) and reduces the number of classes funded for the biennium from 33 down to 25. Talk to your legislators about the local impacts of the higher costs to cover training and having fewer classes for new recruits in your community.

Now that the Governor has released his proposal, we expect to hear from Governor-elect Ferguson with his budget priorities. The legislative budget writers will then spend the 105-day session working on a final plan.

Watch for more detailed information on the Governor’s budget proposal in the next CityVoice newsletter. Importantly, take time to contact your legislators before the session to urge them to protect the PWAA and address needs for law enforcement training and recruitment.