Ferguson asks WA agencies for ‘significant' cuts, citing shortfall
Billions of dollars in new state taxes have not solved Washington state's financial woes, so Gov. Bob Ferguson's budget chief is directing agencies to come up with significant and ongoing" spending cuts.
K.D. Chapman-See, the director of Office of Financial Management, delivered that message in a memo last week, instructing agencies to submit frugal budget requests for the 2027-29 biennium.
Projected state tax collections "will likely not provide sufficient support for the maintenance of current programs, let alone any expansions, despite recent tax code changes," Chapman-See wrote.
Just a few months ago, Ferguson signed a new high-earners income tax into law, which is expected to bring in $3 billion or more a year if it survives a lawsuit and public vote. But money from the 9.9% tax on incomes of more than $1 million won't start flowing until 2029.
In addition to that tax, Ferguson signed a budget package in 2025 adding $9 billion over four years in taxes on businesses and residents, though lawmakers scaled some of those back in the most-recent legislative session.
The growth of state government, including additional spending on schools, healthcare and other services, has outpaced the higher tax revenues.
Chapman-See cited inflation of 39% over the past decade as well as a 14% growth in the state's population. As a result, her memo instructs agencies to submit budget requests focused solely on "mandatory increases" while "not expanding existing programs and services."
"A 'business as usual approach' will not meet the need of this moment - and OFM will be working with each of you to reimagine what it looks like to continue providing essential services to the public while also addressing the budget shortfall," Chapman-See said in the memo.
She gave agencies a deadline of Sept. 14 to submit their budget proposals to OFM.
Ferguson amplified the directive in a post on X over the weekend, saying he's meeting with agencies to talk about his goals: "Preserve core services, protect our state's most vulnerable, don't raise taxes, and address the structural challenges in our budget to achieve long-term financial stability..."
The directive signals the start of what is likely to be a contentious budget debate in the 2027 legislative session that could pit Ferguson's budget-cut demands against a renewed push for higher taxes from progressive Democrats in the Legislature.
Washington's spending-versus-expenses gap has depleted financial reserves, leading the credit-rating agency Moody's to warn that the state's credit rating could get downgraded.
Chapman-See's memo, first reported by the Washington State Standard, did not outline any specific percentages or dollar figures as targets, or name particular programs for the chopping block.
But it said agencies should "plan to pause the phase-in of most new programs" and not propose new initiatives.
Ferguson has also asked agencies to carefully review "base budget expenditures," and to specifically scrutinize any programs created or expanded after Jan. 1, 2019, according to the memo.
He also wants agencies to examine areas where Washington provides "particularly high levels of services relative to other states" or is one of "a handful" of states that offer a program.
In further budget instructions to agencies posted on its website, OFM said Ferguson continues to be focused on "equity" in state services and that agencies should be "considering the impacts of budget requests on marginalized communities.
Governors typically issue their budget proposals in December, before the legislative sessions that begin in January. The 2027-29 budget will be Ferguson's first crack at a full biennial budget proposal.
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This story was originally published June 8, 2026 at 4:55 PM.