Heading into my second term as state treasurer, I’ve seen firsthand how the talented public servants in this office keep our state government running effectively. Our team has refinanced state debt to save taxpayers nearly three-quarters of a billion dollars in future costs while setting record investment returns — generating over $2 billion in new money for state and local governments in the last fiscal year.
Washington holds Moody’s top credit rating (Aaa). U.S. News just ranked our state first in the nation for long-term fiscal stability. Washington’s pensions are one of America’s best-funded and our budget through the end of this fiscal year is balanced with money in reserves.
This is the strong foundation we’ll need to weather what’s coming.
The co-architect of Project 2025, Russ Vought, was nominated to again lead the White House Budget Office and has said in his confirmation hearings he will block money to states as President Donald Trump desires, even if holding up funds violates the law and will of Congress.
When the president unlawfully withholds congressionally authorized funds, he is forcing his will on the people of a state quicker than courts can rule against it. The first wave of executive orders has already tested the bounds of presidential authority.
While there is no ideal moment for a president to unilaterally inflate their authority, the timing for Washington is especially challenging as the Legislature faces a multibillion-dollar gap in its next budget.
This will require disciplined budget crafting in Olympia as legislators carefully consider a broad range of options to address the gap. However, what cannot be an option at this time is depleting our state reserves, which are critical for our financial strength and state sovereignty.
Healthy reserves protect us from economic volatility and, as was the case in recent memory, unprecedented events like a global health crisis. I am thankful that the Legislature followed state treasury recommendations to replenish reserves after the COVID-19 economic recession. This helped secure Washington’s financial standing. Now our reserves will help defend against federal coercion.
I am heartened that Gov. Bob Ferguson’s announced budget priorities call for ensuring strong budget reserves. My office continues to recommend we keep a reserve level of no less than 10% of revenues to maintain our strong credit — a minimum level that is met by all but two states.
To be certain, no state has the reserves to fully replace federal funds — in the 2024 fiscal year, Congress sent $27.4 billion to Washington. But we must have sufficient savings to thwart any effort by the president to influence our state by unlawfully blocking or delaying congressionally directed funds.
Coercive threats have already been made to withhold disaster assistance in California, as was the case here in Washington after the devastating Palouse fires in September 2020. Last week, the Trump administration recklessly blocked congressionally authorized funds to states.
A multibillion-dollar budgetary shortfall may feel like a rainy day, making it tempting to tap reserves. But the real storm clouds are on the horizon.
To keep Washington financially steadfast and prepared for the next four years, I urge state leaders to maintain our reserves. If we are committed to defending Washington’s values and interests, we must preserve this foundational defense.
