Washington state's spending climbed 148% between 2013 and 2025, far exceeding the 112% growth in tax collections over the same period, according to a new report published by the Washington Policy Center. The report, which uses six charts to trace the state's fiscal trajectory, concludes that rapid revenue growth and billions in new taxes haven't kept pace with spending increases. The analysis shows that spending growth outstripped revenue gains by 36 percentage points and exceeded the combined rate of population growth and inflation by 77 percentage points.
The state's three largest existing taxes alone generated roughly $15 billion more annually in 2025 than they did in 2013, even before major tax increases enacted in 2025 and 2026 began producing revenue. State and local taxes per Washington resident jumped from $5,363 in 2004 to $7,713 in 2023 after adjusting for inflation, marking a 44% real increase. The current Near-General Fund-Outlook budget stands at $80.2 billion for 2025–27, compared to what would have been approximately $54 billion if the 2013–15 budget had simply grown with population and inflation—a gap of about $26 billion that the report attributes to policy choices and program expansions. Meanwhile, the scale of new tax packages has escalated sharply: the 2019 package was estimated at roughly $400 million per year, while the 2025 package reached approximately $3 billion to $4 billion annually, the largest tax increase in state history, followed by a 9.9% income tax and other business tax increases in 2026 expected to raise another $2 billion to $3 billion per year once fully implemented.
The report finds that even with the new income tax revenues included, projected revenue for 2027–29 sits at about $82.2 billion against current spending of $80.2 billion, leaving only around $2 billion—or 2.5%—of room for growth before deficits appear. That margin falls far short of both the 15.7% average biennial spending growth since 2017 and the 9.4% projected two-year inflation rate. The analysis states that the gap between spending and revenue growth "reflects policy choices and program growth that population and inflation alone do not explain," describing them as "choices made by the Legislature about where to spend tax dollars."
The report explains that Washington's tax structure grows automatically with economic expansion—taxable sales increase, business receipts rise, and the property-tax base expands—meaning the state wasn't working with a stagnant revenue system before lawmakers began adding entirely new taxes. Yet revenue growth hasn't closed the budget gap because spending has continued to climb faster. The pattern has held even as government collected substantially more from each resident in real terms. Much of the revenue growth from the state's three largest taxes reflects policy changes, particularly to the state property tax, though the automatic growth mechanisms also played a significant role.
If Washington maintains the spending growth rate seen since 2017, the report projects the state will face a budget shortfall of around $7 billion in 2027. The charts together reveal a consistent pattern: the state has collected substantially more from existing taxes and repeatedly added new ones, but revenue growth hasn't closed the budget gap because spending has outpaced it. Even billions in new tax revenue and sustained economic growth haven't been enough to match the pace at which the state's budget has expanded.