1. Overview

The Legislature reconvened in person in January for the first time since 2020. This was the first time two classes of legislators got to participate fully in person and there were dozens of new elected officials in Olympia. Democrats still control both the House and the Senate by comfortable margins, and the majorities remained unchanged from the 2022 election cycle despite an anticipated red wave. Many believe this was due in large part to the U.S. Supreme Court decision last fall overturning Roe v. Wade

The 2023 Legislative session was productive and major legislation was passed in various policy areas. We discuss below some of the subject areas that attracted the most attention.

Notably, we anticipate a special session to convene to address an additional policy related to the Blake Supreme Court decision on the topic of drug possession. An effort to pass legislation failed in the final hours of the session and the issue must be addressed before June 30th when the temporary legislative solution passed during the 2021 session will sunset. This issue is further described below.

2. Budget

Before diving into the policy areas of biggest import, we start with the budget. The Legislature faced a changing budget environment in 2023. Temporary federal funding has already been or will soon be depleted. While inflation has slowed, it remains higher than prior to the pandemic. While revenue collections in the current biennium have remained strong, revenue over the next two biennia is expected to grow at a slower-than-average rate. The final 2023-2025 Operating Budget of $69.8 billion was about $2.4 billion higher than the 2021-2023 Budget. Some new cost drivers were K-12 staff salary inflation and statutory provisions around early learning and child care.

3. Key Topic Areas:

a. Climate/Environment

The past few sessions have seen the passage of significant climate-related legislation. While the new policies passed in the last few years are in their initial implementation period, that trend continued this session with the passage of a clean energy sitting bill. The bill directs the Department of Commerce to establish a new program for the designation of Clean Energy Projects of Statewide Significance and has a fiscal impact of roughly $30 million over the next 4 years.

A bill to kickstart a new Washington industry producing sustainable aviation fuels also passed. The bill offers tax incentives to promote the state’s alternative jet fuel industry. The B&O tax breaks would go into effect after one or more facilities produce at least 20 million gallons of alternative jet fuel.

A bill overhauling the state’s recycling system, known as the Washington Recycling and Packaging (WRAP) Act, failed to advance out of the House. The final Operating Budget included a study to inform the development of legislative proposals to increase recycling, reuse, and source reduction rates –including how to implement a producer responsibility model for consumer packaging. Both the policy and the study will remain controversial for opponents, as another bill is anticipated for the next session.

A bill to help the state’s largest investor-owned utility manage its pathway to reducing natural gas as an energy source narrowly failed to secure passage in the face of substantial opposition from the hospitality and building industries.

b. Housing & Homelessness

A substantial number of bills have been introduced this session to address multiple aspects of housing –renter protections, various constraints on housing supply, density regulations, and the growing number of unhoused individuals statewide.

Those desiring more housing density were pleased with the passage of the bipartisan middle housing legislation which requires cities of certain sizes to allow more dense housing options like duplexes, triplexes, and in some cases simplexes. The bill came with controversy as cities opposed it since it was first introduced in 2022, although the Association of Washington Cities was mostly supportive of the final bill. Another bipartisan victory was the passage of the Covenant Homeownership Program which allows an additional $100 increase to the document recording fee to provide down payment and closing cost assistance to economically-disadvantaged people.

Legislation streamlining building permit processes, reforming design review, providing SEPA exemptions for residential development, and easing barriers to the construction and use of accessory dwelling units also passed. Legislation related to lot splitting failed to pass but is expected to come back next year. The Legislature also made historic public investments in housing, despite not accepting the Governor’s $4B referendum proposal on the topic.

An additional disappointment to housing advocates was the failure to pass the Governor’s transit-oriented development bill to increase the housing supply near major transit facilities. Disagreements between the House and Senate about whether to include affordability criteria in the bill could not be resolved before the session ended.

Another area where many bills failed to advance related to renter protections. Legislation that would have placed a cap on rent failed to gain traction, as did legislation requiring landlords to provide several months’ notice for rent increases. A bill requiring more documentation by landlords in order to keep all or some of a tenant’s security deposit due to damages did pass.

c. Policing & Public Safety

The Legislature in 2021 passed a dozen police reform bills that were generally opposed by law enforcement and supported by the families of individuals impacted by police violence. Law enforcement agencies have since argued that this legislation restrained their ability to prevent or investigate certain crimes and that crime increased as a result.

To respond to these concerns, the Legislature passed a bill expanding the scope of vehicular pursuits. The bill reduced the legal threshold to initiate a pursuit from probable cause to believe a crime was committed to reasonable suspicion that a crime was committed. Law enforcement argued the law passed in 2021 prevented them from following a potential perpetrator when they had limited evidence to initiate a pursuit. The bill that passed in this session expands the reasons an officer can initiate a pursuit to those where a person in the vehicle has committed or is committing a violent offense, a sex offense, a vehicular assault offense, an escape offense, driving under the influence offense, or a domestic violence assault offense. While there was bipartisan support for the final bill, many on both sides of the aisle were divided on the approach.

Some of the progressive members hoped to decriminalize jaywalking and limit traffic stops arguing that these laws disproportionately impact communities of color, but these bills were unable to gain traction in both chambers due to the focus on addressing the aforementioned public safety concerns.

The Legislature also grappled with how to address the 2021 Washington State Supreme Court decision which ruled Washington’s felony drug possession law was unconstitutional, known as the Blake Decision. Because this initial decision came in the middle of the 2021 Legislative session, they enacted a temporary fix to allow them to work on a more permanent solution. The Legislature needed to act this session to either recriminalize drug possession and if so, determine whether to make that crime a misdemeanor, gross misdemeanor, or felony, or choose to not pass a bill and simple possession would not be illegal. The Legislature struggled with this until the final day of the session. On the penultimate legislative day, a conference committee recommended a compromise bill that diverts many people convicted of drug offenses to substance abuse treatment programs, while still treating offenses as gross misdemeanors. That bill failed to garner enough support from Democrats and no support from Republicans and failed to pass the House floor with a vote of 43-55. Without a path to agreement in the final hours of the session, the Legislature adjourned with the plan to return and reach an agreement later this spring.

Washington became the 23rd state to end the use of the death penalty. A gubernatorial moratorium against the use of the death penalty has been in place since 2014. In 2018, the Washington Supreme Court ruled the death penalty unconstitutional because it is “administered in an arbitrary and racially biased manner.” In response to a letter from the Supreme Court proposing technical fixes to a wide range of Washington laws that had been ruled unconstitutional, the legislature passed a bill that removes those statutes from the Washington Code of Laws, including the one authorizing the death penalty. As a result, the death penalty is no longer legal in Washington.

d. Transportation

The transportation budget drew a lot of interest this session, especially with the notion that Climate Commitment Act receipts would provide funding for many new carbon-reducing initiatives.

Near the session’s end, the Office of Financial Management (The Governor’s fiscal arm), sent a letter to the House and Senate Transportation Chairs with strong concerns that their proposed budgets only partially funded projects, and “set an unrealistic financial plan set-up for failure and disappointment.” OFM also noted the budgets fall short of addressing the significant maintenance and preservation needs throughout the state.

The final compromise budget spends $13.4B on traffic safety projects, expanding the Washington State Patrol and Washington Ferries workforces, vehicle electrification, support for projects authorized in the last transportation funding package, and continuing the state’s commitment to investing $1B in replacing the I-5 bridge over the Columbia River.

e. Firearm Safety

Substantial gun safety policies have been passed in recent years, and this was another historic year. The Legislature acted to prohibit the manufacture, importation, distribution, sale, or offer for sale of any assault weapon (I.e., AR-15 or AK-47), which are used in some of the deadliest mass shootings.

The Legislature also allowed individuals and the state Attorney General to bring suits against bad actors in the gun industry who cause harm as a result of not taking reasonable steps to keep guns out of the hands of gun traffickers and those who are prohibited from possessing them. The Legislature also implemented a new 10-day waiting period for all gun purchases to ensure effective cooling-off periods for people who may purchase guns during a personal crisis and requires all gun owners to take firearm safety training. Finally, a bill requiring schools to share information provided by the Department of Health about the secure storage of firearms and ammunition was also passed this year.

f. Physical & Behavioral Health

For the second session in a row, legislation was introduced to address nurse staffing ratios, meal and rest breaks, and overtime policies. After weeks of negotiations between nurse unions and hospitals, a compromise bill that didn’t address ratios but placed additional oversight on hospitals to meet staffing plans and ensure access to meal and rest breaks and prohibit required overtime for some nurses passed the Legislature. Additionally, hospitals were granted access to a new safety net assessment system that allows assessments to be collected from hospitals. These assessments are used in combination with federal funds for increased payments to hospitals. This funding will help address bed capacity issues caused when hospitals are unable to discharge patients to low-acuity facilities due to systemwide bed shortages.

The Legislature continued to prioritize investing in behavioral health services this session by including funding in the budget to provide to increase rates for Medicaid behavioral health services paid through managed care organizations and for non-Medicaid behavioral health services paid through BH-ASOs by 15%.

g. Health Data Privacy & Abortion Access

House and Senate Democrats started this session prioritizing the protection of access to abortion care. They passed a package of bills that shielded Washington businesses from responding to out-of-state requests and subpoenas related to the provision of protected health services (abortion care and gender-affirming care). They protected the licenses and personal information of Washington state and out-of-state providers who work here due to changing laws in other states. They expanded access to abortion care without cost sharing. Finally, the state purchased a three-year supply of the abortion medication mifepristone to ensure continued access while its FDA authorization is challenged in court.

For the fifth year in a row, the Legislature considered data privacy legislation. This year the bill was narrowed to focus on reproductive health data. The “My Health My Data Act” was pushed by the Washington Attorney General and Planned Parenthood. While it was intended to protect women’s health data, opponents to the legislation argued it would have broad-reaching impacts and had concerns that the bill would lead to a broader data privacy bill passing in the future with similar enforcement mechanisms (i.e., private right of action). The bill passed with strong Democratic support and the Governor has indicated that he will sign it.

h. Other Policy Changes

Since 2008, advisory votes have caused confusion for voters whose ballots ask whether they wish to maintain or repeal recent tax laws passed by the Legislature, despite the fact that their votes do not change the tax law. In this session, the Legislature abolished advisory votes and replaced them with more useful and accurate online information that explains elected representatives’ budgeting decisions.

The legislature also passed a bill regulating certain warehouse distribution centers to ensure sufficient time for breaks and gives the Department of Labor and Industries investigative oversight to ensure the safety of warehouse employees.

4. Pending Items

A bill introduced for the last two sessions to tax Washington’s billionaires received additional consideration this year. The bill imposes a wealth tax but exempts the first $250 million in household wealth. The bill failed to advance again this year but will remain part of the conversation as lawmakers continue to seek ways to address perceived regressivity in the current tax structure.

The Legislature also considered making additional changes to the state’s graduated real estate excise tax (REET). They also considered removing the 1% property tax cap. Neither measure gained enough traction to pass in the final days of the session.