Washington Democrats are discovering the hard way that you can only balance a budget on wishful thinking for so long.

New state collections data show Olympia already running $113.8 million behind projections just two months into the budget cycle — a dangerous position when lawmakers left themselves with a microscopic $231 million ending balance on a budget approaching $80 billion. In other words, Democrats built the state budget with about the same financial margin most people keep in their couch cushions.

Former State Senator and Bellevue Chamber CEO Joe Fain called it “riding the knife,” which may actually be too generous. This looks less like careful budgeting and more like a Vegas gambler insisting the next hand will definitely fix everything.

And here’s the truly remarkable part: tax revenue is still growing.

Revenue Act collections increased 6.5 percent over last year, meaning this isn’t some economic apocalypse where money suddenly vanished. The problem is simpler: Democrats spent so aggressively that even rising revenue can’t keep up with Olympia’s addiction to bigger government.

That’s what happens when lawmakers pass $9.4 billion in new taxes, then immediately come back demanding even more — including their shiny new 9.9 percent income tax set to hit Washington families in 2028. Apparently the plan was to tax, spend, assume the tech sector would grow forever, and hope nobody noticed the state budget was being held together with duct tape and optimistic spreadsheets.

Unfortunately for Olympia, the economy didn’t cooperate.

Washington’s unemployment rate has climbed above the national average. Seattle-area unemployment has surged as tech layoffs continue piling up. Employers are pulling back. Businesses are eyeing the exits. But instead of tightening spending, Democrats kept writing checks like Amazon stock was still doubling every six months.

Now the June revenue forecast is shaping up to be a political horror movie sequel nobody wanted but everyone saw coming.

Fain warned that if collections don’t improve, the state could blow through its entire remaining balance and fall into technical deficit territory. At that point, Democrats will face the consequences of their own budgeting fantasy: emergency spending cuts, a special legislative session, or — because this is Olympia — another round of tax hikes sold as “shared sacrifice.”

Even the smaller revenue streams are flashing warning signs. Property taxes, liquor taxes, cigarette taxes, and miscellaneous Department of Revenue collections all came in below forecast. The few bright spots? Real estate excise taxes and court fines. So congratulations, Democrats — apparently Washington’s strongest growth industries are housing costs and government penalties.

For years, Republicans and fiscal watchdogs warned that Democrats were building budgets around unrealistic assumptions and temporary revenue spikes. They were mocked for it. Now the numbers are catching up, and suddenly the “adults in the room” are staring down a budget hole before the biennium has barely started.

Turns out governing by progressive wish list is a lot easier when someone else eventually pays the bill. Read more at Seattle Red.

A new survey highlighted by the Association of Washington Business paints a grim picture for Washington’s economy — and it’s becoming increasingly clear Democrats’ policies are driving employers toward the exits.

According to AWB’s quarterly survey of more than 400 businesses, nearly one in four employers are considering moving their business out of Washington, while 55% of business owners are now considering moving their personal residence out of state. In Spokane County, just across the border from business-friendly Idaho, that number jumps to a staggering 67%.

AWB Vice President Morgan Irwin told The Center Square the trends are all moving in the wrong direction: confidence in the economy is collapsing, business expansion plans inside Washington are shrinking, and recession fears are climbing rapidly.

And honestly, none of this should surprise anyone paying attention.

Democrats spent years piling on new taxes, regulations, fuel costs, and now a 9.9% income tax — all while insisting businesses would happily absorb the cost. Instead, companies are increasingly looking elsewhere, with 38% of surveyed businesses planning expansion outside Washington compared to just 9% planning to expand within the state.

Taxes were ranked the number one concern among employers, followed by healthcare costs and Washington’s regulatory environment. Fuel prices also exploded as a top concern thanks in large part to the Climate Commitment Act, which critics say adds more than 50 cents per gallon to already sky-high gas prices. Washington drivers are now paying around $5.76 per gallon for unleaded fuel — because apparently Olympia believes working families should finance climate activism every time they fill up.

Naturally, progressive activists rushed in to dismiss the findings, claiming fears about businesses and wealthy residents leaving are merely a “myth.” Democrats always seem to believe economic warnings are imaginary right up until the moving trucks start showing up.

The broader problem for Democrats is that surveys like this keep confirming what Washington residents already feel in real life: it’s becoming increasingly expensive, increasingly difficult, and increasingly frustrating to live and do business in a state run by ideological activists who treat taxpayers like an unlimited ATM. Read more at Center Square.

the Wall Street Journal editorial board tore into Washington Democrats and the state Supreme Court for allowing Olympia’s new 9.9 percent income tax to dodge a voter referendum under the guise of being an “emergency” measure.

The editorial board pointed out the obvious flaw: if the tax is such an urgent necessity for state government, why doesn’t it even take effect until 2028?

The ruling was a major blow to opponents of the tax, including Let’s Go Washington founder Brian Heywood, who warned the decision effectively gives lawmakers a roadmap to pass virtually any tax they want while shielding it from voters. Emails previously revealed Democrats discussing how to structure the legislation to overturn nearly a century of precedent against income taxes in Washington.

And Democrats aren’t exactly hiding where this is headed. In leaked video obtained by Future 42, Representative April Berg (D-Everett) openly described the millionaire income tax as merely the “next incremental step” after the state’s capital gains tax — confirming what critics have warned all along: the push for a broader income tax was never going to stop with millionaires.

The Wall Street Journal editorial board concluded with a warning that now hangs over the entire case: if the Washington Supreme Court truly respects precedent, it should ultimately strike the tax down as unconstitutional. But we aren’t holding their breath. Read more at Seattle Red.

Former Attorney General Rob McKenna says there may still be reason for opponents of Washington’s new income tax to feel hopeful — even after the Washington State Supreme Court unanimously blocked a referendum on the measure this week.

The court ruled the new 9.9% tax on income above $1 million qualifies as “necessary” for state government operations, allowing Democrats to shield it from a public vote by attaching a necessity clause. Critics pointed out the obvious problem with that logic: the tax won’t even generate revenue until 2029.

McKenna, now part of the legal challenge against the tax, recently told The Center Square that while the ruling was disappointing, the court’s repeated references to following “an unbroken line of precedent” could become important later when the constitutionality of the income tax itself reaches the justices.

That’s because Washington courts have historically ruled that income is property — and Washington’s constitution prohibits graduated taxes on property.

McKenna also warned Democrats’ increasing use of emergency and necessity clauses is systematically stripping voters of powers they intentionally placed into the state constitution through initiatives and referendums. In short: Olympia keeps finding creative ways to protect lawmakers from the inconvenience of public opinion.

The controversy grew even larger after emails revealed Washington Solicitor General Noah Purcell advised lawmakers to attach the necessity clause in the first place — reinforcing critics’ accusations that Democrats knew voters would likely reject the tax if given the opportunity.

Opponents can still pursue an initiative to repeal the tax, but unlike a referendum, it would require more than 400,000 signatures to qualify for the ballot — another reminder that when Democrats can’t win the easy vote, they make the process harder instead. Read more at Center Square.

A new WalletHub report found Washington ranks near the bottom nationally for financial literacy education, exposing yet another failure from an education system more focused on ideological trends than preparing students for real life.

Washington ranked near the bottom because the state has no requirement that students take a personal finance or economics course before graduating. Just 2.7% of public high school students are guaranteed to take at least one semester of personal finance education — a statistic that helps explain why so many young adults leave school knowing more about activism than interest rates, debt, or budgeting.

WalletHub analyst Chip Lupo told The Center Square that top-performing states like Utah, Virginia, and Florida require students to learn personal finance and economics as part of graduation requirements. Washington, meanwhile, has spent years debating the issue while students continue graduating without basic financial skills.

GOP Representative Skyler Rude has repeatedly pushed legislation to require financial literacy education, arguing students need practical knowledge about loans, insurance, debt, and investing before entering adulthood. But like many common-sense reforms in Olympia, the effort has stalled in a legislature far more interested in expanding bureaucracy than teaching kids how not to drown in credit card debt.

The irony is hard to miss: Democrats keep passing massive taxes, complicated regulations, and expensive mandates — while graduating students who were never even taught how taxes, loans, or compound interest actually work. Read more at Center Square.

Please consider making a contribution to ensure Shift continues to provide daily updates on the shenanigans of the liberal establishment. If you’d rather mail a check, you can send it to: Shift WA | PO Box 956 | Cle Elum, WA 98922

Forward this to a friend.  It helps us grow our community and serve you better.

You can also follow SHIFTWA on social media by liking us on Facebook and following us on Twitter.

If you feel we missed something that should be covered, email us at [email protected].