Washington Revenue Forecast Added $430 Million to Outlook

State tax collection estimates rose, potentially impacting how lawmakers structure future biennial budgets.

Updated on Sept. 26, 2026 in Taxes

Washington Revenue Forecast Added $430 Million to Outlook

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The Economic and Revenue Forecast Council released an updated tax collection report projecting an additional $430 million in revenue for the 2027-2029 budget cycle. This shift comes as the state balances increasing service costs against the potential repeal of an income tax on high earners in November.

Why it matters

Higher revenue projections help lawmakers manage the state budget, though the state still faces a projected fiscal deficit for 2028. These forecasts are critical for state planning as officials prepare for the upcoming legislative session.

The latest forecast projects $82.6 billion in total revenue for the 2027-2029 biennium, an increase of $430 million over prior estimates. These figures are subject to change, with the next official update scheduled for mid-November.

The players

Bob Ferguson

The Governor of Washington who signed the high-earner income tax legislation into law.

Economic and Revenue Forecast Council

The state body responsible for producing revenue projections used to build biennial budgets.

Department of Revenue

The state agency that analyzes tax trends and provides the data necessary for budget forecasting.

The details

The Department of Revenue uses ongoing economic indicators to update projected income tax collections, which target individual and household wage income exceeding $1 million at a 9.9% rate. Lawmakers in Olympia rely on these periodic forecasts to construct two-year spending plans. Because demand for state services continues to grow, these revenue estimates directly influence the scope of potential spending programs.

March 2026: Governor Bob Ferguson signed the high-earner income tax legislation.
September 25, 2026: The Economic and Revenue Forecast Council released the latest forecast.
November 2026: Voters will decide the future of the tax via Initiative 645.
January 2027: The legislative session begins to determine final spending plans.
January 1, 2028: The income tax is scheduled to take effect.

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Money Landscape

This forecast provides a snapshot of Washington's fiscal health as the state approaches the 2027-2029 budget cycle. The projections remain tethered to the outcome of Initiative 645, which will determine the status of the high-earner income tax.

While these forecasts do not directly change your personal tax liability, they signal the state's fiscal direction for essential services and future budget planning. Residents should monitor the outcome of the November ballot, as the potential repeal of the income tax could shift the state's long-term tax strategy.

The takeaway

State budget health is currently being shaped by both rising revenue projections and the upcoming ballot vote on tax policy. Residents should prepare for potential changes in state funding priorities following the November election results.