Washington state lawmakers began a 60-day session Jan. 12, in which a fiscal reckoning, flood recovery, and their own reelections loom large.

They departed Olympia last spring, fingers crossed that a colossus of budget problems had been defeated with a one-two punch of spending cuts and new taxes. It was not. 

Adding to the difficulties: massive changes foisted upon states in the federal law dubbed “beautiful” by its Republican sponsors and “ugly” by its Democrat detractors.

Then came the havoc of December’s heavy rains and flooding. The financial toll for residents and public infrastructure is still being tallied. But it won’t be cheap. And it’s not clear yet that the Trump administration will step in with federal aid.

Meanwhile, Gov. Bob Ferguson came out last month in full support of an income tax on individuals earning over $1 million a year, setting up a major debate on tax policy.

Two controversial citizen initiatives are pending, but are dead on arrival in the Legislature and will likely go to voters in the fall.

Plus, policy debates are percolating on topics ranging from pennies to policing to pensions.

And it’s an election year. All 98 House seats and roughly half of the 49 Senate seats will be on ballots. Those sitting in them now know their votes in the next two months could determine if they will be back in 2027.

Here are four questions for which we don’t know the answers, yet.

How will they balance the budget?

When Ferguson arrived in office a year ago, he pegged the multi-year shortfall in the state operating budget at $12 billion, a figure he later upped to $16 billion. The first-term Democratic governor and the Democratic-run Legislature responded with spending cuts throughout state government and imposing billions of dollars in new and higher business taxes.

A year later, Ferguson says the state is facing another gap, this one at least $2.3 billion, between what Washington expects to collect in tax receipts and the amount needed to cover the state’s expenses through mid-2027. That doesn’t include the tab for the December floods.

Crafting a solution will be a challenge. Cutting deeper could undermine public services. But Republicans and others say if Democrats keep piling on taxes, it could drive people out of business or out of the state. 

Ferguson has proposed very precise cuts as a fix this time around. 

He also wants to move large sums of cash out of accounts where it’s not needed immediately. This includes using $569 million of Climate Commitment Act revenue to cover the expense of the Working Families Tax Credit for low- and middle-income households, and a proposal to siphon $1 billion from the state’s rainy day reserve fund. 

Some Democrats are skeptical of using that much of the climate money on the tax credits, rather than spending it to reduce air pollution. Republicans balk at the rainy day fund drawdown.

Legislative budget writers will put out their blueprints in late February.

Will progressives get their income tax?

Ferguson delivered arguably the session’s biggest news before the opening day gavel.

It came last month with his call for taxing the income of those earning more than a million dollars a year. This is the same governor whose preaching of austerity at his inauguration 12 months ago drew glares from Democratic legislators.

Those turned to scowls when he publicly and privately rejected Democratic proposals for a so-called “wealth tax,” a statewide payroll tax on large employers and a higher cap on annual property tax collections by local governments.

With his embrace of an income tax, progressives’ frowns may be easing. But Ferguson attached strings to his support. That makes some of them wary of whether he’ll sign what is sent to him — presuming something is passed.

To survive, the tax will need to be designed to withstand an inevitable court challenge. Lawmakers are also looking at how to possibly funnel money from the tax to the Working Families Tax Credit or to underwrite various other forms of targeted tax relief. Deciding how to use the revenue could further complicate the debate. 

There are election-year realities, too. While the governor is not on the ballot this year, most of the Democrats who would need to vote for the tax will be.

Will Heywood’s initiatives factor in?

Let’s Go Washington, the political committee led by hedge fund manager Brian Heywood, has become a perennial thorn in the side of majority Democrats in Olympia. The group is back this year with a new set of initiatives.

One would roll back changes Democrats made last year to the group’s 2024 parental bill of rights initiative. The other would bar transgender athletes from competing in girls’ sports.

These are initiatives to the Legislature, meaning they go to lawmakers for consideration before possibly ending up on the ballot. Top Democrats made clear Jan. 9 that the initiatives will not get a hearing in the House or Senate this session, all but guaranteeing that they’ll go to voters to decide in November. 

While the initiatives may be blocked legislatively, they could still pop up in the form of protests at the Capitol, or with Republicans finding ways to hammer on the wedge, culture war issues involved with an eye toward Election Day.

How will Ferguson fare?

Ferguson got off to a rocky start during his first session as governor, with staff drama and many Democrats miffed as he made a show of reaching out to Republicans and as he reined in progressive tax proposals.

This session is a moment when Ferguson will either succeed or fail in showing he’s a force that can drive the conversation and the priorities in Olympia.

Backing the income tax on high earners should build some goodwill among members on his party’s left flank, but it’ll also put him front and center in a Republican narrative that Washington Democrats are out of control on spending and have an endless appetite for taxes.

During last year’s session, Ferguson could readily fall back on the assertion that he inherited a budget blueprint — and budget troubles — from his predecessor, Jay Inslee. That kind of deflection will become increasingly difficult moving forward, as what’s happening now is squarely on his watch.

This story is republished from the Washington State Standard, a nonprofit, nonpartisan news outlet that provides original reporting, analysis and commentary on Washington state government and politics.