When the 2025 Washington State Legislative Session convenes Jan. 13, lawmakers will have their work cut out for them. The state’s Economic and Revenue Forecast Council report projects a budget shortfall of up to $12 billion over the next four years, driven primarily by declining state revenue and rising inflation. Gov. Jay Inslee estimates the deficit may be closer to $16 million.

In his proposed 2025-2027 budget, Inslee seeks to address the gap without making deep reductions to priority areas such as education, mental health services and law enforcement. His proposal includes $2 billion in delays and spending cuts, many of which will have a serious impact on economic development across the state. The most notable include significant reductions to:

• Associate Development Organizations (like the EDB)
• Microenterprise Development Organizations
• Statewide tourism efforts
• The Clean Energy Site Readiness program
• The Small Business Resiliency Network

The proposed budget also eliminates Washington’s Industrial Symbiosis and Circular Economy Market Development programs.

There is some positive news for economic development in the governor’s proposed budget, however, including:

• Significant clean energy/clean economy investments.
• Continued funding for the Washington Small Business Development Center.
• A slight increase in the Governor’s Strategic Reserve Fund.
• Continued funding for the Industry Sector Development , Small Business Export Assistance and International Marketing programs.

WEDA: A united voice for economic development

Amid the challenging budget environment, the Washington State Economic Development Association (WEDA) will be a unified voice for economic development and employment growth statewide, working to restore proposed cuts and, ideally, secure more resources.

WEDA is the state’s only trade association dedicated exclusively to economic development and is committed to helping Washington state recover, retain, recruit and expand jobs. Its members include economic development organizations, including the EDB, as well as cities, counties, tribes, businesses, education and community-based organizations.

“The Washington Economic Development Association plays a critical role in ensuring the state remains competitive for business and talent, especially during challenging times like a projected budget shortfall,” EDB President and CEO Michael Catsi said. “WEDA’s work helps prioritize investments that drive economic growth, create jobs, and build a resilient economy for all communities across Washington.”

Prosperity for all of Washington

WEDA’s 2025 Legislative Priorities focus on the most critical actions lawmakers can take to support job growth, vibrant and resilient communities, equity and investment across the state.

While the EDB supports all of WEDA’s legislative requests, four specific issues stand out for the 2025 session that aim to ensure Washington’s continued economic vitality and competitiveness:

1. Increased funding for Associate Development Organizations, such as the EDB:Additional state funding for ADOs is essential for local economic development. Current funding has remained stagnant for 15 years, despite expanding responsibilities. This is particularly challenging for rural organizations.
2. Infrastructure investment tools: Support for programs, tools and tax policies that finance critical infrastructure is necessary to enhance state competitiveness, attract out-of-state investment and leverage federal funding opportunities.
3. Retention of key tax incentives: It is vital to maintain and expand Business & Occupation tax credits and incentives to drive job creation and growth in sectors such as aerospace, manufacturing, clean energy, agriculture and creative industries.
4. Green economy initiatives: The EDB strongly supports funding, policies and incentives for green economy projects, including industrial symbiosis, hydrogen and green fuels, and innovations in renewable and zero-carbon technologies.

For more information:

• Read the full WEDA 2025 Economic Legislative Agenda.
• Learn more about Gov. Inslee’s 2025-2027 budget.