Washington State Revenue Forecast Increased
The state expects higher income tax revenue as voters prepare to decide on a repeal initiative this November.
Updated on Sept. 26, 2026 in Taxes
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The Washington Economic and Revenue Forecast Council released a revised tax collection report, projecting higher revenue for the state's upcoming biennial spending cycle. The forecast highlights increased receipts from the state income tax on high earners.
Why it matters
State leaders rely on these periodic economic forecasts to construct two-year biennial spending plans as the demand for essential services and state resources continues to rise.
The council expects the 9.9% tax on individual and household income over $1 million to generate $3.5 billion for the 2027-2029 budget. Projections show total state revenue reaching $82.6 billion for that same biennium.
The players
Bob Ferguson
Bob Ferguson is the Governor of Washington who signed the high-earner income tax legislation into law.
Economic and Revenue Forecast Council
The council is an official body that produces economic and revenue forecasts used by the state government for budget planning.
Department of Revenue
This state agency is responsible for analyzing tax collection data and assisting with state revenue projections.
The details
The Department of Revenue conducted a fresh analysis following June report findings to adjust its revenue outlook for the state. Washington faces a multimillion-dollar deficit in the 2028 fiscal year, despite the revised figures.
Timeline
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 on Initiative 645 to repeal the income tax.
January 2027: The legislative session begins to determine spending plans.
January 1, 2028: The income tax is scheduled to take effect.
Market Dynamics
The state faces a high-stakes fiscal environment as the potential repeal of the income tax through Initiative 645 sets up a direct clash between tax-based budget expansion and voter sentiment. This shift reflects a broader trend of states using specific high-earner levies to bridge funding gaps.
High-earning individuals in Washington should monitor the November vote, as the scheduled implementation of the 9.9% tax rate remains contingent on the outcome of Initiative 645. Future tax liabilities for households earning over $1 million could change depending on the election result.
The takeaway
The latest forecast provides a clearer picture of potential state funding levels, but voter action remains the primary variable for the future of the income tax. Residents should track the upcoming ballot initiative to understand its potential impact on state-level spending and revenue.
Further reading
For more background on state budget projections, visit Washington Taxes.
Source note: This article includes information reported by My Edmonds News.
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Do you support using high-earner income taxes to balance state budget deficits?
