The Washington State Economic and Revenue Forecast Council revealed earlier this month that the state will collect $720 million less over the next four years than previously estimated.
Governor Bob Ferguson announced that Washington state will use state funds to cover the gap left by the federal government’s defunding of Planned Parenthood, even as the state grapples with a significant revenue shortfall and an unprecedented surge in government spending.
The move comes just months after Ferguson signed into law the largest tax increase in state history. Despite that revenue-boosting package, the Washington State Economic and Revenue Forecast Council revealed earlier this month that the state will collect $720 million less over the next four years than previously estimated. That shortfall puts additional pressure on the state’s newly enacted $77.9 billion operating budget for 2025–2027, a record-breaking plan built on a sweeping set of new taxes and fees.
The budget increases state spending by 8.2 percent over the previous cycle and was passed despite earlier warnings of a looming $16 billion deficit. To plug that hole, Democrats approved six major tax increases, including:
Critics are raising alarms over the razor-thin $2 million cushion left in the state’s general fund, a slim margin that offers little room for unexpected economic turbulence.
Ferguson, who once expressed opposition to taxing working families, defended his decision to sign the tax-heavy package. “I said, hey, we’re not going to be able to tax our way out of this. It became equally clear early on in the process that we’re not going to cut our way out of it,” he said, calling the budget a “necessary compromise” to protect essential services.
Now, despite the grim fiscal outlook, Ferguson is committing to backfill federal Medicaid funding for Planned Parenthood, should ongoing litigation fail to reverse the cut.
On July 4, President Donald Trump signed the “One Big Beautiful Bill,” which imposes a one-year moratorium on federal Medicaid funding for Planned Parenthood, a move Ferguson condemned as a “blatantly political, cruel attack on reproductive rights.”
According to Ferguson, Planned Parenthood receives at least $22 million annually in Medicaid reimbursements, including $11 million from the federal government.
According to the Washington State Checkbook, Planned Parenthood already receives over $59 million in local taxpayer dollars. Despite that, Ferguson says the state will not allow Washingtonians to lose access to Planned Parenthood because of the federal freeze.
“I will not allow that to happen,” Ferguson said. “While we have a very challenging budget in Washington, and cannot backfill every cut in this Big Betrayal Bill, we must step into this temporary gap to ensure women continue to have access to critical health care.”
Planned Parenthood is currently challenging the federal cuts in court.
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