NAIOPWA Legislative Session Report - Week 7

Krystelle Purkey and Ehren Flygare, State Lobbyists

The most significant development of the week besides fiscal committee actions prior to the February 28 Fiscal Committee cutoff was Governor Bob Ferguson’s news conference, where he outlined approximately $4 billion in additional budget cuts for the legislature to consider. These cuts, on top of those in Governor Inslee’s proposed budget, could cover nearly half of the state’s projected shortfall.

Currently, the state operates on a balanced budget that extends through June 30, 2025. However, the primary focus of the 2025 legislative session is crafting a new operating budget for the following years. A significant challenge looms: a projected $15 billion gap between expected tax revenue over the next four years and the state’s existing financial commitments, including funding for education, healthcare, corrections, and human services.

In 2023, NAIOP Washington State successfully defeated a bill during the legislative session that would have increased the real estate excise tax (REET). We anticipate similar legislation during the 2024 Washington State Legislative Session. During this session, REET may be rebranded as a “transfer tax.”  While we were previously successful in our efforts to stop a REET increase from moving forward, NAIOPWA’s Government Affairs team is actively engaged to defeat its passage once again.

Wednesday’s meeting started with the passing of the gavel and official induction of Scott Mathews as the 2019 President of NAIOP Washington State. Scott is the Senior Director, Acquisitions & Residential Development, for Vulcan, Inc. Much gratitude was given to Tony Toppenberg of Turner Construction Company for his service this past year.

The 2017 session of the Washington State Legislature is now in its second 30-day special session in order to find agreement on the level and sources of funding for the McCleary decision to fully fund K-12 education. The legislature is expected to reach agreement by the end of the special session on June 21, or by June 30, the final day of the current biennium.

The Washington Supreme Court ruled in McCleary that school districts’ reliance on local levies, and the ability of local communities to pay for those levies, varied dramatically around the state and resulted in inequitable funding of K-12 education. The legislature’s challenge has been to equitably fund education statewide.