Democratic leaders, pointing to strong public support for existing progressive revenue measures, pushed for new taxes to balance the budget. Governor Ferguson, however, signaled early and often that he would not accept a budget that leaned more on taxes than on cuts. In the end, lawmakers adopted a $77.8 billion budget with nearly $6 billion in cuts and close to $9 billion in new revenue over four years—far less than Democrats initially proposed.

Sustained advocacy from Life Science Washington and the broader business community helped block especially harmful tax proposals, including a wealth tax and statewide payroll tax. Our efforts also contributed to a final B&O tax increase that was broader, less targeted, and significantly smaller than earlier versions, helping mitigate the impact on Washington’s innovation economy.

Still, several changes in this year’s tax package directly impact life sciences companies and our ecosystem. First, an increase in the capital gains tax rate now makes Washington one of the highest capital gains tax rates in the nation, which could have significant impact on the state’s investment climate.  Second, new rules implemented related to the state supreme decision related to the Antio case will subject more companies to B&O tax on investment income and raising significant funds could push startups into higher tax brackets.  See details of all the tax changes below.

Governor Ferguson’s approval of the budget is due by May 20. He could issue partial vetoes, yet vetoes of any tax measure would likely trigger the need for a special legislative session to rebalance the budget to make up for reduced spending capabilities.

Thanks to proactive engagement before session, top policy threats like PDAB expansion and state-level changes to the 340B program did not advance—but both remain high-risk areas to watch.

Midway through session, LSW and Cyrus Biotechnology CEO Lucas Nivon testified before the House Technology, Economic Development & Veterans Committee to showcase the strength of Washington’s life sciences industry and highlight the need to maintain momentum. Lucas also urged careful AI regulation, noting that biotech AI—unlike consumer applications—requires FDA oversight and lab validation.

Click here to see a detailed report of Life Science Washington budget and policy priorities and new tax legislation that passed the legislature.

Have questions, comments, or concerns about these bills or any other pending legislation? Get in touch with LSW’s Public Affairs Manager, Curtis Knapp.

The post Policy Blog – May 12, 2025 – Washington’s 2025 Legislative Session Ends with High Stakes and Hard-Fought Compromises appeared first on Life Science Washington.

Other notable legislation included a rent cap limiting annual increases (with exemptions for buildings less than 12 years old), a 6-cent per gallon gas tax hike to sustain transportation projects, and a new requirement for certified firearms training for most gun buyers.

The Seattle Times covered highlights of the new state budget and tax package:

• WA Legislature Passes $78B Budget, Rent Cap, Gun Permits as it Adjourns: https://www.seattletimes.com/seattle-news/politics/wa-legislature-passes-78b-budget-rent-cap-gun-permits-as-it-adjourns/
• WA Lawmakers Sprint to Finish Line with Final $9B Tax Plan: https://www.seattletimes.com/seattle-news/politics/wa-lawmakers-sprint-to-finish-line-with-final-9-billion-tax-plan/

Now that the legislature has passed the budgets and tax plans, Governor Ferguson has 20 days to review the plans and sign, veto, or partially veto any of the bills. At this point it remains unclear whether he may veto any of the tax plans. While he is certain to sign the budgets, he may choose to veto individual sections. Ferguson said he is “carefully reviewing the budgets line by line over the next few weeks,” and that he will “carefully review all revenue increases.” LSW worked closely with legislators throughout the session to protect critical investments and safeguard the state’s environment for life sciences innovation:

• Career Connect Washington: LSW opposed proposed cuts to this vital workforce development initiative, emphasizing its role in creating sustainable pipelines of life sciences talent. While advocacy helped mitigate the deepest cuts, the program will still see a reduction in funding, and we are actively evaluating the full implications for the life sciences workforce pipeline.

• Tax Policy: LSW successfully advocated to preserve the nonprofit research preferential Business & Occupation (B&O) tax rate, maintaining critical support for the state’s research institutions. After sustained advocacy from LSW and other business groups, the final B&O tax increase changed significantly from early proposals. Lawmakers ultimately adopted a broader, less targeted, and overall smaller increase — avoiding some of the most harmful impacts on Washington’s innovation economy.

Through sustained advocacy alongside other business allies, Life Science Washington helped mitigate major risks and preserve key drivers of industry growth during a complex and consequential legislative session. We will soon publish a full overview summarizing the outcomes for each of the policy, budget, and tax issues we tracked and advocated for throughout the session.

Here are the measures that passed:

• Capital Gains and Estate Taxes – SB 5813 (Wilson) / HB 2082 (Street)
  • Adds a 2.9% excise tax on capital gains over $1 million, on top of the current 7% tax applied to gains over $270,000 (adjusted annually for inflation).Increases estate tax rates for individuals who pass away after July 1, 2025 (changed from January 1, 2025).
• Business and Occupation (B&O) Tax Surcharges – SB 5815 (Saldaña) / HB 2081 (Fitzgibbon)
  • Increases B&O tax rates on sectors such as manufacturing, retail, child care, and gambling.
  • Imposes a 0.5% surcharge on businesses with state income over $250 million.
  • Raises rates on existing B&O surcharges. Funds would support public schools, higher education, healthcare, and social services. 
• Property Tax Cap Adjustment – SB 5812 (Wellman) / HB 2049 (Bergquist)
  • Adjusts the annual 1% cap on property tax increases to allow for growth tied to inflation and population, capped at 3%.
  • Revenue would support K–12 education, including special education. 
• Sales Tax on Services and Nicotine Products – SB 5814 (Frame) / HB 2083 (Stonier)
  • Expands the state’s sales and use tax to cover services like IT consulting, temporary staffing, and advertising.
  • Includes all nicotine products, whether synthetic or tobacco-derived, under the tobacco products tax.
  • Imposed a tax of $.10/cigarette
  • Requires a one-time prepayment of state sales tax from businesses with $3 million+ in taxable retail sales in 2026. The revenue would support education, healthcare, social services, and other programs.
  • SB 5814 passed the Senate on 4/19 by a vote of 27-22.
• Closing Ineffective & Obsolete Tax Preferences – SB 5794 (Salomon)
  • Repeals, modifies, or clarifies the legislative intent of certain tax preferences.
  • SB 5794 passed the Senate on 4/19 by a vote of 26-21-1.
  • Following LSW advocacy, the bill no longer repeals the preferential rate for nonprofit research and development.

Through sustained advocacy alongside other business allies, Life Science Washington helped mitigate major risks and preserve key drivers of industry growth during a complex and consequential legislative session. We will soon publish a full overview summarizing the outcomes for each of the policy, budget, and tax issues we tracked and advocated for throughout the session.

Have questions, comments, or concerns about these bills or any other pending legislation? Get in touch with LSW’s Public Affairs Manager, Curtis Knapp.

The post Policy Blog – April 28, 2025 – Legislature Adjourns with Budget Cuts and Major Tax Implications appeared first on Life Science Washington.

In response to Ferguson’s April 1st announcement that he will not sign a budget that relies on a wealth tax, Democratic lawmakers began exploring several new tax proposals aimed at generating revenue for public services, education, and healthcare.

But on Thursday afternoon, just hours before the $12B tax package was set to be advanced by the Senate Ways & Means Committee, Governor Ferguson voiced concerns in a press release, calling it “too risky.” However, Ferguson did not present any level of tax revenue policy he would sign, nor specific programmatic cuts he would recommend. 

While the cumulative impact on Washington’s life science industry remains concerning—especially given the state’s long-standing, founder-friendly tax climate—recent changes reflect advocacy efforts led by Life Science Washington. The package no longer includes a payroll tax proposal and a bill to repeal “obsolete” exemptions no longer eliminates the preferential B&O rate for nonprofit research.

Here are the key measures Democrats have proposed:

• Capital Gains and Estate Taxes – SB 5813 (Wilson) / HB 2082 (Street)
  • Adds a 2.9% excise tax on capital gains over $1M, on top of the current 7% tax applied to gains over $270,000 (adjusted annually for inflation). Increases estate tax rates for individuals who pass away after January 1, 2025.Raises the estate tax exclusion from $2.1M to $3M. Revenue from this bill would go to the Education Legacy Trust Account. 
  • SB 5813 passed the Senate  on 4/19 by a vote of 27-21-1 and is scheduled for a hearing in House Finance on 4/21

• Business and Occupation (B&O) Tax Surcharges – SB 5815 (Saldaña) / HB 2081 (Fitzgibbon)
  • Increases B&O tax rates on sectors such as manufacturing, retail, child care, and gambling. Imposes a 0.5% surcharge on businesses with state income over $250M. Raises rates on existing B&O surcharges. Funds would support public schools, higher education, healthcare, and social services. 
  • HB 2081 passed House Finance on 4/19.

• Property Tax Cap Adjustment – SB 5812 (Wellman) / HB 2049 (Bergquist)
  • Adjusts the annual 1% cap on property tax increases to allow for growth tied to inflation and population, capped at 3%.
  • Revenue would support K–12 education, including special education. 
  • HB 2049 passed House Finance on 4/19.

• Sales Tax on Services and Nicotine Products – SB 5814 (Frame) / HB 2083 (Stonier)
  • Expands the state’s sales and use tax to cover services like IT consulting, temporary staffing, and advertising.
  • Includes all nicotine products, whether synthetic or tobacco-derived, under the tobacco products tax.
  • Imposed a tax of $.10/cigarette
  • Requires a one-time prepayment of state sales tax from businesses with $3 million+ in taxable retail sales in 2026. The revenue would support education, healthcare, social services, and other programs.
  • SB 5814 passed the Senate on 4/19 by a vote of 27-22.

• Closing Ineffective & Obsolete Tax Preferences – SB 5794 (Salomon)
  • Repeals, modifies, or clarifies the legislative intent of certain tax preferences.
  • SB 5794 passed the Senate on 4/19 by a vote of 26-21-1.
  • Following LSW advocacy, the bill no longer repeals the preferential rate for nonprofit research and development.

• Financial Assets Tax – SB 5797 (Frame)
  • Establishes a tax at a rate of $0.34 per $1,000 of the true and fair value on certain financial intangible assets on the portion of assets owned by a Washington resident in excess of $50M.
  • SB 5797 passed the Senate Ways & Means Committee on 4/18.

• Repealing or Modifying Tax Preferences — HB 2084 (Ramel)
  • Eliminates tax preferences for the sale of precious metals and bullion.
  • Imposes the business and occupation tax on gross receipts derived from the rental of individual self-service storage units.
  • Restores the B&O preferential tax rate of 0.138 percent for warehousing and reselling prescription drugs.
  • HB 2084 passed the House Appropriations Committee on 4/19.

• The House concurred in the Senate amendments to the Right to repair bill, ESHB 1483 as amended.  It now heads to the governor for his signature. 
• SB 5455, technical amendments relating to the Andy Hill Cancer fund, passed the House and is on its way to the governor for his signature. 
• HB 2068 is the bill relating to regulating and taxing tobacco and nicotine products.  It’s known as the “kids flavored tobacco bill” and it would provide some funding for the Andy Hill Cancer fund.  It was heard on April 7^th but no executive session scheduled yet.

Have questions, comments, or concerns about these bills or any other pending legislation? Get in touch with LSW’s Public Affairs Manager, Curtis Knapp.

The post Policy Blog – April 21, 2025 – The End Game is Here? appeared first on Life Science Washington.

While policy debates continue on the House and Senate floors, budget negotiations are ramping up behind the scenes. Fiscal leaders are working to reconcile legislative funding priorities with Governor Ferguson’s call for reduced spending and less reliance on new revenue. Life Science Washington has been actively lobbying to protect critical investments like Career Connect Washington and to ensure that new tax proposals don’t unintentionally harm the life sciences industry. See our previous explanations of the tax proposals and read our letters to legislators urging action to retain the preferential B&O tax rate for research and to preserve Career Connect Washington.

Work on most of the policy bills is complete. Right to repair, (HB 1483) passed the Senate 48-1. It is now headed back to the House for concurrence. It is expected that the House will concur, and the bill will be sent to the governor for his signature.

SB 5455, technical amendments relating to the Andy Hill Cancer fund, is awaiting a vote by the full House. It should pass before the April 16 cutoff.

HB 2068, relating to regulating and taxing tobacco and nicotine products, is scheduled for executive action on Friday. This is known as the “kids flavored tobacco bill”, and it would provide some funding for the Andy Hill Cancer fund.

As the session nears its end, high-profile bills often reach their final stages. HB 1217 (Alvarado, D-34), which proposes a statewide rent cap and related housing provisions, illustrates how contentious legislation moves through last-minute negotiations. After passing the Senate Ways & Means Committee last week, the bill advanced to the Senate floor, where amendments raised the cap from 7% to 10% + CPI and exempted single-family homes not owned by real estate trusts or companies.

In these final days, bills that pass both chambers in different forms, like the rent cap bill, must be reconciled. The originating chamber can agree to the changes (“concur”) or request further negotiations through a conference committee. Only when both chambers agree on the final language does a bill move to the governor for signature. This stage is where final compromises are struck—and where key policy battles are often resolved.

Have questions, comments, or concerns about these bills or any other pending legislation? Get in touch with LSW’s Public Affairs Manager, Curtis Knapp.

The post Policy Blog – April 14, 2025 – The Legislative End Game is Near appeared first on Life Science Washington.

In addition, we will be closely monitoring and communicating with legislators about the use of Workforce Education Investment Account (WEIA) funds. Ensuring these dollars are directed toward their intended purpose—expanding access to high demand degree programs—remains a top priority.

At a press conference last week, Governor Bob Ferguson outlined five key conditions that any budget must meet for him to sign it. Rejecting the budgets proposed by majority legislative Democrats, he stressed the following requirements:

• The Rainy Day Fund (Budget Stabilization Account) must remain untouched. While the Senate’s proposal draws from these reserves, the House’s version does not.
• The budget must be based on realistic revenue projections, rather than the legally permitted 4.5% projection. Ferguson supports the Senate’s approach in this regard.
• New spending should be minimal due to current fiscal constraints. “This is not the time for major investments in any program, no matter how worthwhile,” he cautioned.
• The budget must include significant savings and efficiencies—amounting to billions—while preserving essential services like K-12 education and public safety.
• It cannot rely on revenue sources like the proposed wealth tax that may face legal challenges and risk being overturned in court.
  

Ferguson’s firm stance will be a challenge for lawmakers as they work behind closed doors toward a final budget agreement by Sine Die. The Seattle Times covered the governor’s press conference and the implications for lawmakers’ efforts to strike a budget deal. Read the article here.

A new bill introduced last week would raise taxes on tobacco and vape products and ban flavored varieties. HB 2068 proposes an additional $2 tax per pack of cigarettes, with adjustments every three years for inflation. It also sets the tax on vape and alternative nicotine products at 95% of the taxable sales price.

Importantly for LSW members, the first $25M in revenue would be split evenly between the Andy Hill CARE Fund and public health initiatives. Any revenue beyond that amount would go to the state general fund.

Earlier in the session, similar legislation to ban flavored products failed due to concerns over an estimated $234M loss in state revenue. However, this new bill is considered more revenue-neutral and has been designated as “necessary to implement the budget.” It is currently awaiting a full fiscal note to assess its estimated revenue impact.

• ESHB 1483, right to repair, was voted out of the Senate Environment, Energy and Technology Committee on Tuesday.  The committee adopted an amendment to clarify the exemption for medical devices.  The amended bill was referred to the Senate Rules Committee.
• SB 5455, making technical corrections to the Andy Hill Cancer Fund, passed out of the House Health Care Committee on Tuesday.  It’s now in the Rules Committee.
• ESSB 5594, relating to biosimilar medicines, died in the House Health Care Committee.  During executive session, Rep. Thai asked that the bill be deferred to continue work on the bill during the interim.

Life Science Washington joined all of our sister state biotech associations in signing a letter urging Congress to restore immediate R&D expensing by passing the bipartisan American Innovation and R&D Competitiveness Act (H.R. 1990). Since 2022, changes to Section 174 of the tax code have forced companies to amortize R&D costs over five years—diverting critical R&D funds from early-stage biotechs working on life-saving treatments.

LSW member companies joined us in urging the previous Congress to take this action, and we continue to advocate alongside them to ensure this priority is addressed. The nationwide coalition, coordinated by the Council of State Bioscience Associations (CSBA), emphasized that restoring immediate expensing is existential to pre-revenue, early-stage life science startups and is essential to sustaining the U.S. biotechnology pipeline and supporting local economies.

Have questions, comments, or concerns about these bills or any other pending legislation? Get in touch with LSW’s Public Affairs Manager, Curtis Knapp.

The post Policy Blog – April 7, 2025 – Budget and Tax Talks Heat Up appeared first on Life Science Washington.

We emphasized that our state didn’t become a top 10 life science hub by accident. It took decades of research, public investment, and entrepreneurial grit. Today, the industry supports more than 112,000 jobs and contributes nearly $39B to the state economy.  The reality is that the state is just now reaping the rewards of investments made a decade ago. Many of the state’s most effective programs—like the Life Sciences Discovery Fund and R&D tax incentives—have expired, and we’re falling behind states like Massachusetts and North Carolina that are doubling down on their support.

Cyrus Biotechnology CEO Lucas Nivon made the case for why careful consideration of attempts to regulate artificial intelligence at the state level is critical, especially in the rapidly evolving space where biotech meets artificial intelligence. Lucas explained how biotech AI is fundamentally different from the consumer AI tools making headlines. Unlike generative models that produce text or images instantly, biotech AI is a tool for research and discovery that must be tested in a lab and go through rigorous FDA approval. Washington is a global leader in this area, thanks in part to pioneers like Cyrus and the Institute for Protein Design, and we have the opportunity to stay ahead—but only if regulations are centered in allowing innovation to prosper.

We delivered a strong message to lawmakers that the life sciences industry is an economic engine and a public good. With strategic reinvestment, we can grow jobs, attract capital, and deliver life-saving innovation for decades to come.

Click Here to watch the work session.

We also met with key lawmakers in Olympia to discuss proposed tax measures, particularly focusing on Senate Bill 5796, which introduces a 5% payroll tax on wages exceeding the Social Security threshold of $176,100 for companies with payroll expenses over $7M. While proponents have characterized it as a tax on the state’s largest corporations, LSW highlighted how the measure would also disproportionately impact life science startups—many of which have no revenue, rely heavily on competitive grants and venture capital. While we emphasized the broader industry’s opposition, these startups, some with as few as 40 employees, could face significant financial strain, potentially hindering innovation and growth within Washington’s life sciences sector.

LSW emphasized the need for lawmakers to consider the unique financial structures of these companies to prevent unintended consequences on this vital industry. At this point, it remains unclear whether the bill will advance, but we are urging lawmakers to make changes to the bill to protect Washington’s life science industry.  

Read more from Microsoft’s Brad Smith on the broader impact of the payroll tax proposal here:
https://www.geekwire.com/2025/microsoft-president-says-new-proposed-business-taxes-in-washington-state-will-weaken-tech-sector/

On Monday, the Senate Ways & Means Committee will hear its five revenue bills SB 5797 (financial intangibles tax), SB 5796 (large employer payroll tax), SB 5798 (property tax lid lift),  SB 5794 (eliminating obsolete and ineffective tax preferences), and SB 5795 (sales tax reduction).  The House’s three revenue bills, HB 2046 (financial intangibles tax), HB 2049 (property tax lid lift), and HB 2045 (large business B&O tax surcharge) will be heard on Thursday.  We also may see Governor Ferguson’s revenue preferences next week.

See our explanation of the bills here:
https://lifesciencewa.org/reports/policy-blog-march-25-2025-budgets-and-taxes-week-in-the-legislature/ 

This week, legislative committees will vote on bills that have already passed the opposite legislative chamber, including:

• HB 1493, right to repair, is scheduled for executive session in the Senate Environment, Energy and Technology Committee on Tuesday.  There will be an amendment to clarify the exemption for medical devices.
• SB 5455, making technical corrections to the Andy Hill Cancer Fund, should be passed out of the House Health Care Committee on Tuesday.
• SB 5594, relating to biosimilar medicines, will also be acted on in the same meeting.

Have questions, comments, or concerns about these bills or any other pending legislation? Get in touch with LSW’s Public Affairs Manager, Curtis Knapp.

The post Policy Blog – March 31, 2025 – LSW Briefs Lawmakers on Washington’s Life Sciences Ecosystem appeared first on Life Science Washington.

Life Science Washington Policy Priorities

Regular legislative activity resumed last week, with committees reviewing and debating bills that have advanced from the opposite chamber. Some of these include high profile bills like Unemployment Insurance for Striking Workers (5041), Waste Management (5284), Firearm Restrictions in Sensitive Places (5098) and Rent Stabilization (1217). These hearings are part of the lead up to the April 2 deadline for bills to be passed out of policy committees, including these priorities from our legislative agenda:

• HB 1483, the right to repair bill is scheduled for a hearing on Wednesday in the Senate Environment, Energy & Technology Committee.  We will be working with the committee for a technical amendment to the exemption for medical devices.
• SB 5455, the making technical changes to the Andy Hill CARE Fund is scheduled for a hearing on Tuesday in the House Health Care & Wellness Committee with LSW’s support
• SB 5594, Biosimilar Medicines, is scheduled for a hearing on Wednesday in the House Health Care & Wellness Committee. LSW and BIO worked previously to amend the bill, alleviating concerns about prescribing and pharmacy practices.

Also last week, LSW CEO Marc Cummings participated in a work session in the House Postsecondary Education & Workforce Committee on the impact of Career Connect Washington in driving industry-supported degree and certificate programs to help meet the workforce needs of Washington’s life science industry. Watch the video here.

This Friday, LSW will present at a work session on the state’s life sciences ecosystem in the House Technology, Economic Development & Veterans Committee. With so many new legislators and emerging policy issues like potential regulation of artificial intelligence, we are grateful for this opportunity to share a positive message on the impact of our industry in the state. The University of Washington will also be part of the panel. You can watch the work session here.

Legislative budget writers received bad news last Tuesday with the latest state revenue forecast. In the upcoming two-year budget beginning July 1, projections indicate a decline of $479M, bringing the total revenue collection to just under $71B. For the 2027-2029 biennium, the latest forecast anticipates a $420M decrease, with revenue expected to reach $76.4B. Washington’s chief economist noted that the state’s revenue collections have yet to fully stabilize since the pandemic.

Majority Democrats released their proposed budgets on Monday and will vote them out of committee on Thursday. The budgets will then move to the floor, with Senate action likely on Saturday the 29^th, and House floor action likely on March 31^st.

The House and Senate Democrats also released their respective revenue proposals last week. These proposals identify their revenue solutions to address the state’s substantial budget deficit. Collectively, the tax increases would more than cover the state’s $15B shortfall, but it remains unclear which proposals may advance, and whether any have Governor Ferguson’s support. Life Science Washington is working to educate lawmakers on the impact to life science companies, particularly early state companies engaged in R&D without bringing in revenue.

We were glad to see that our highest-priority budget item, the CARE Fund, was funded; however, other important programs, such as Sector Leads and CCW, remain at risk. The real work ahead will focus on the evolving revenue proposals, and we will keep you updated as we learn which proposals begin to gain traction.

The Senate proposals include:

• SB 5797 (Frame, D-36) Financial Intangibles Tax — a tax of $10 on every $1,000 of assessed value of certain financial assets (stocks, bonds, exchange-traded funds, and mutual funds) held by individuals with more than $50M of these assets, paid by about 4,300 individuals. It would generate approximately $4B per year starting in fiscal year 2027 for public schools.
  
• SB 5796 (Saldana, D-37) Removing the Cap on Employer Payroll Taxes — a 5% tax on large employers on the amount of payroll expenses above the Social Security threshold — currently $176,100 per year. This tax is limited only to companies with $7M or more in payroll expenses— about 5,289 companies. The proposal is similar to the city of Seattle’s “JumpStart” tax and includes a full credit for businesses already paying that tax. It would raise about $2.3B per year once fully implemented, going to public schools, health care, basic needs assistance for seniors and those with developmental disabilities.
  
• SB 5798 (Pedersen, D-43) Allowing Property Tax to Grow by Population and Inflation — raising the property tax growth limit for the state’s common schools levy and for cities and counties, as well as special purpose districts, from the current 1% cap to the combined rate of population growth plus inflation. Local governments have the option to take a lower growth rate if they choose. The proposal also completely exempts participants in the “Property Tax Exemption for Senior Citizens and People with Disabilities” program from paying the state property tax. The state property tax is dedicated to public schools, with about $779M in additional funding over the full four-year budget cycle, while increased funding in cities and counties would go to public safety, criminal justice, and community protection.
  
• SB 5794 (Salomon, D-32) Repealing Tax Preferences — repealing 20 tax exemptions where the public policy objective was not met, it is unclear whether the policy objective was met, or the exemption is legally obsolete, according to nonpartisan auditors at the Joint Legislative Audit & Review Committee, including for in-state hauling, gold bullion, prescription drug wholesalers, and more. This would generate just over $1B over the full four-year budget cycle for public schools, health care, and social services.
  
• SB 5795 (Krishnadasan, D-26) Cutting Sales Tax – a half-point sales tax reduction, from 6.5% to 6% – a decrease in revenue of approximately $1.3B per year.

House proposals include:

• HB 2046 (Berg, D-44) – Financial Intangibles Tax– imposes a property tax of $8 on every $1000 of assessed value on certain financial intangible assets, such as stocks, bonds, mutual funds, and index funds, with the first $50M in assessed value exempt from the tax. Other exemptions include pensions, retirement accounts, and education savings accounts. The Department of Revenue estimates around 4,300 Washingtonians would pay the tax, generating approximately $2B per year, beginning in fiscal year 2027, which will be dedicated to the Education Legacy Trust Account.
  
• HB 2049 (Bergquist, D-11)– Increasing State and Local Flexibility to Fund Schools and Public Safety – would modify the state and local property tax authority and adjust the school funding formula. The bill maintains the 1 percent cap on property tax growth but allows for increases based on inflation and population changes, not to exceed 3 percent. The bill also adjusts levy equalization methods. The Department of Revenue estimates the change would increase funding for state investment in K-12 schools by $50M in fiscal year 2026 and $150M in fiscal year 2027.
  
• HB 2045 – (Fitzgibbon, D-34) – Surcharge on High-Grossing Corporations and Financial Institutions – would impose a 1% Business & Occupation (B&O) tax surcharge on businesses with taxable income over $250M. This surcharge applies to approximately 400 businesses statewide. The bill also includes an increase to the surcharge on specified financial institutions (approximately 200) with annual net income of $1B or more from 1.2% to 1.9%. Under this proposal, Washington would generate nearly $600M in fiscal year 2026 and nearly $2B in fiscal year 2027.

Have questions, comments, or concerns about these bills or any other pending legislation? Get in touch with LSW’s Public Affairs Manager, Curtis Knapp.

The post Policy Blog – March 25, 2025 – Budgets and Taxes Week in the Legislature appeared first on Life Science Washington.

Every year, the house of origin cutoff brings anticipation over the “5 PM bill”—the last bill taken up before the deadline. While debate can continue late into the night as long as discussion begins before 5 PM, this final measure often carries symbolic weight. Some years, it’s a hotly debated and controversial issue that stretches proceedings into the early hours; other times, it’s a broadly supported, feel-good resolution.

This year, the House’s 5 PM bill was HB 1296 (Stonier, D-49), a controversial student and parental rights measure that passed along party lines after an intense overnight debate ending at 2:15 AM. Meanwhile, the Senate chose SB 5263 (Pedersen, D-43), a bipartisan special education funding bill, which passed unanimously after an emotional discussion.

On March 18 the state’s economists will release a new revenue forecast.  This will be the basis for budgets proposed by the House and Senate Democrats.  Interestingly, Governor Ferguson has said that the June forecast will be the important one because by then we should have a better understanding of potential federal cuts, particularly to Medicaid.  Assuming there is a budget agreement before Sine Die, the legislature might have to come back into session to deal with a deficit caused by federal cuts.  

Senate Democrats will release their budget on March 24^th, with a hearing on March 25^th.  This budget will include a combination of cuts, new revenue, and savings.  The House is expected to release their budget around the same time, but it’s unclear whether their revenue package will be included in their budget or announced later in session.

Much of the legislature’s remaining activity of interest for Life Science Washington members will be focused on the budget and taxes. After the revenue forecast, we will have a better idea of the vulnerability of programs we have been advocating for. This includes protecting core elements of Career Connect Washington that foster industry-supported workforce development initiatives, fully funding the Andy Hill Cancer Research Endowment (CARE) Fund, and investing in program and capital projects at our state’s universities that drive high demand degree programs.

Bills that passed their chamber of origin before the cutoff include:

• HB 1483, Right to Repair—we will be working to pass a small technical amendment to clarify the status of medical devices. 
• SB 5455, Making technical changes to the Andy Hill Cancer Research Endowment Fund
• SB 5594, Biosimilar medicines—pass the Senate unanimously following adoption of amendments agreed to by all stakeholders, including BIO and LSW, relating to prescribing and substitution practices for interchangeable biological products.

Bills that died include:

• HB 1155, Prohibiting noncompetition agreements
• HB 1076, Health Technology Assessment program

Have questions, comments, or concerns about these bills or any other pending legislation? Get in touch with LSW’s Public Affairs Manager, Curtis Knapp.

The post Policy Blog – March 17, 2025 – Crossing the Rotunda: Bills Face Their Next Test After Key Deadline appeared first on Life Science Washington.

As with the previous legislative deadlines, bills that do not clear this stage of the process are generally considered dead for the session, unless deemed “necessary to implement the budget” (NTIB). However, it’s worth noting that no bill is entirely off the table until the legislature’s final adjournment.

So far, two bills LSW is monitoring have cleared their respective chambers:

• HB 1483, Right to Repair, passed the House 94-1. While there is language exempting medical devices, AdvaMed would like to see it made clearer. We will be working to clarify that provision when the bill is heard in the Senate. 
  
• SB 5284, plastics/recycling, passed out of the Senate by a vote of 27-22. This is the so-called producer responsibility bill, and it includes exemptions sought by BIO and LSW for FDA regulated products including vaccines and biologics.

On the heels of Governor Ferguson’s budget cut exercise last week, another effort in the budget and tax space launched Monday. People for an Affordable Washington, a new PAC, placed a banner ad on the Seattle Times website highlighting increased government spending without seeing progress on education, homelessness, housing affordability, or the rising cost of living.

Read more about the state budget, including the state spending choices the led to our current $12-$15B revenue shortfall, here.

While Governor Ferguson has laid out his priority for government efficiency over increased taxes, legislative leaders have made it clear that revenue options remain on the table. In December, Senate Democrats inadvertently released the options they are considering, including:

• Removing the cap on payroll taxes,
• Additional B&O tax surcharge on employers with >$500M income,
• Removing the $9M B&O tax surcharge cap on advanced computing surcharge,
• Implementing a 1% wealth tax on taxpayers with more than $50M in financial assets,
• Increasing the capital gains tax,
• Others include raising the property tax levy lid, increasing the Real Estate Excise Tax, removing the sales tax exemption on storage units, and implementing a new sales tax on firearms and ammunition.

Legislation proposing any of these options would be considered NTIB and not subject to the typical cutoff deadlines, but it remains unclear which bills already introduced in the House and Senate could move forward, and more yet could be introduced.

We are working to educate lawmakers about how many of these options would not simply hit “big businesses,” but could have a devastating impact on Washington’s ecosystem of small and mid-size life sciences companies.

Have questions, comments, or concerns about these bills or any other pending legislation? Get in touch with LSW’s Public Affairs Manager, Curtis Knapp.

The post Policy Blog – March 10, 2025 – Legislature Reaches Halfway Point appeared first on Life Science Washington.

Some of the bills that survived to see another day include the following:

• Right to Repair (HB 1483)—includes LSW’s medical device exemption
• Biosimilars (SB 5594)—successfully amended to include LSW and BIO’s fix for pharmacist substitution policies
• Non-compete agreements (HB 1155)— a coalition of AWB members are trying to get an amendment that would exempt senior level employees from the provisions of the bill.  If that provision is not in there, the consensus is that AWB and its members should oppose the bill.

As the legislature turns to the budget, key LSW priorities include the Andy Hill Cancer Research Endowment Fund (CARE Fund), Career Connect Washington, and industry sector leads at the Department of Commerce, among others listed in our legislative agenda. The big question will be whether Democrats pursue new revenue.  You can learn more about the budget situation at the resources compiled here.

The committee deadlines wasn’t even the biggest news out of Olympia last week—it was Governor Bob Ferguson’s news conference, where he outlined approximately $4B in additional budget cuts for the legislature to consider. These cuts, on top of those in Governor Inslee’s proposed budget, could cover nearly half of the state’s projected $15B gap between expected tax revenue over the next four years.

Included in the cuts is the elimination of a $6M backfill in federal funding for Career Connect Washington (CCW) that Governor Inslee had funded in his final 2025-27 budget proposal. Importantly, Ferguson’s proposal carries forward CCW’s ongoing appropriations. LSW’s partnership with CCW is critical for our efforts to drive industry-supported programming at our state’s community colleges and four-year universities, including replicating Shoreline’s biomanufacturing certificate program at Spokane Community College and supporting the University of Washington Bothell’s Center for Biotechnology Innovation and Training. In the coming weeks, LSW will be advocating to legislators about the importance of maintaining industry-supported career readiness programs like CCW. 

Governor Ferguson said his cost-reduction framework focused on improving efficiency before considering new revenue options. He hopes this will guide the legislature as it considers a balance between program cuts and new revenues. The governor emphasized, “Washingtonians expect that we will increase revenue as a last resort… I will not start contemplating additional revenue options until we have exhausted efforts to improve efficiency.”

In developing the $4B in Ferguson’s proposed cuts, state agencies were instructed to assess programs based on specific criteria, targeting:

• Recently launched programs
• Those funded by temporary federal aid
• Programs over four years old
• Services reaching fewer than 1,000 people annually
• Programs lacking performance tracking or mandated by legislation

Have questions, comments, or concerns about these bills or any other pending legislation? Get in touch with LSW’s Public Affairs Manager, Curtis Knapp.

The post Policy Blog – March 3, 2025 – Budget Battle Looms Large appeared first on Life Science Washington.