business backgrounder | legislative
maximum prices, small changes that will hopefully drive down costs as the state waits for market linkage with California.
Another bill modifies the Clean Building Performance Standard, allowing greater flexibility to meet energy efficiency requirements. This helps building owners better manage the costs from this program.
Unfortunately, lawmakers voted to pass a bill which will create much higher stringency for the Clean Fuel Standard. This increased stringency will be one more factor which adds to upwards pressure on gas prices.
environment recycling bill lacks clarity grade: c
Following seven years of discussion, lawmakers passed the Extended Producer Responsibility( EPR), which aims to overhaul the state’ s recycling system. In reality, the bill creates complicated new regulations that will drive up prices of everyday goods, with many details yet to be worked out. Based on similar legislation in California, AWB expects the bill to cost each Washington household $ 300 per year and $ 6,000 to $ 12,000 for businesses.
health care, workforce, education, and child care cuts all around grade: d
There were multiple troubling bills in the areas of health care and education / workforce.
One of the biggest concerns is a bill that will cap reimbursement payments to hospitals from state employee health plans.
“ This comes at a time when hospitals don’ t have extra money, they don’ t have big margins, and they are really struggling to provide care to certain communities,” said Emily Wittman, AWB’ s lead on health care, workforce, education and child care.
Higher education access and career-connected learning also took a hit in the 2025 session. The Legislature reduced income eligibility for the Washington College Grant and slashed aid for students attending independent colleges. Career Connect Washington, which works with schools and employers to expand work-based learning opportunities, also saw dramatic funding cuts.
Lawmakers also failed to increase access to affordable child care in a holistic way. They raised the B & O tax rate on child care centers as part of overall B & O tax increases and delayed the expansion of child care under the Fair Start for Kids Act until 2029.
“ We did very, very little to help increase housing supply in Washington state, and we did a lot to hurt it.”
— Morgan Irwin, AWB interim VP of government affairs and lead on land use, transportation and technology.
The budget relies on a 6-cent-per-gallon hike in the gas tax – the first increase in nearly a decade. It also introduces numerous other fee hikes, including higher tire replacement fees and increased vehicle weight fees. The new transportation fees come on top of general tax increases in budget.
“ Adding this together makes for an extremely difficult economic environment for employers of all sizes and employees as they commute to and from work,” said Morgan Irwin, interim VP of government affairs and lead on land use, transportation and technology.
land use & housing rent control passes grade: f
The Legislature passed a rent control bill that limits annual rent increases to 7 % plus CPI, with a hard cap of 10 %. AWB and many other groups pushed back against this bill, warning the policy would discourage housing investment.
One of the most detrimental parts of the bill relates to exemptions for new projects. Builders requested that the new housing developments be free of rent control for at least 20 years for financing reasons, warning that a shorter window would push projects out of state. The final bill includes a much shorter exemption period of 12 years.
“ We did very, very little to help increase housing supply in Washington state, and we did a lot to hurt it,” Irwin said. transportation gas tax hike and new fees grade: c to c-
At the start of the session, legislators faced a $ 1 billion hole in the transportation budget and debated many new revenue options. They ultimately passed a $ 15.5 billion bipartisan transportation budget that includes money for highway megaprojects, ferries and increased investments in payment preservation— an AWB priority.
Morgan Irwin and Emily Wittman discuss the 2025 session.
34 association of washington business