Washington is among several states facing a budget shortfall. The costs to maintain current services and program levels for the next four years have risen approximately $12.6 billion due to inflation, higher projected caseloads in several safety net programs, expansion of popular programs like early learning, and workforce costs. Revenues have dipped lower than forecasted due to lagging home sales and collections for sales and capital gains taxes.

Spending freeze in effect

On December 2, 2024, Governor Jay Inslee directed all agencies under his direction and control to freeze non-essential hiring and spending. This freeze directive remains in effect until further notice. The OFM website will be updated if Governor Bob Ferguson amends or rescinds the freeze directive.

Reduction targets

On January 24, 2025, OFM directed state agencies to identify and submit operating budget reduction proposals, based on Governor Bob Ferguson's budget priorities for 2025-27. Cabinet agencies must identify spending reductions of at least 6% from the 2025-27 biennial appropriations in Governor Inslee’s budget proposal, with the following exceptions:

• No reductions to agencies serving K-12 students, Community and Technical Colleges, the Washington State Patrol, the Department of Corrections, and the Criminal Justice Training Commission.
• Entitlements that are cash benefits to residents are excluded.

Four-year public higher education institutions are urged to identify spending reductions of at least 3% of their Near-General Fund appropriations. Independent boards and commissions and separately elected officials are urged to identify and propose to OFM reductions for their agencies of at least 6%. 

Cabinet agencies will receive their agency’s budget reduction targets separately from the OFM senior budget advisors. Proposals must be submitted by February 6, 2025 using the budget savings option spreadsheet.

Once we've analyzed the agency budget saving proposals, we will post them to the OFM website. 

Timeline and what’s next

• Nov. 8, 2024: OFM directed state agencies to propose budget savings options so the governor’s budget could focus on continuing essential services and addressing caseload increases. The savings options submitted are posted online.
• Dec. 2, 2024: Governor Jay Inslee directed all agencies under his direction and control to freeze non-essential hiring and spending.
• Dec.17, 2024: Governor Inslee released a balanced budget proposal that included many reductions or delayed implementation of certain programs over the next four years. It also included changes to the business and occupation tax, and a new wealth tax. Funding for the 2025-27 collective bargaining agreements is included in Gov. Inslee’s proposal.
• Jan. 9, 2025: Governor-elect Ferguson released his budget priorities for 2025-27.
• Jan. 24, 2025: OFM directed cabinet agencies to identify operating budget reduction proposals for 2025-27 not already included in Gov. Inslee's budget.
• Feb. 6, 2025: Deadline for agencies to submit budget reduction proposals to OFM.
• After Feb 6: OFM will post agency submittals online after time for analysis. Governor Ferguson will work with OFM and agencies to finalize details of his reductions proposal and to provide his framework to legislative budget writers.The Legislature must pass a final budget for action by the governor.