Gov. Bob Ferguson signed Washington’s $79.4 billion supplemental operating budget on Wednesday, a plan that taps $880 million from the state’s rainy day fund, cuts $143 million in child care subsidies, and projects an $878 million deficit by 2028 — two days after he signed the millionaires tax whose revenue won’t arrive until 2029.

What Was Cut

The state’s two largest reductions target families with young children. The Working Connections Child Care program, which subsidizes care for low-income families, loses $143 million through a change in how the state reimburses providers — shifting reimbursement from enrollment to actual daily attendance. The Transition to Kindergarten program for four-year-olds loses $27 million, a cut supporters say will eliminate as many as one-third of the program’s 7,266 slots. School districts that rely on local effort assistance — a per-student supplement for property-poor districts — will not receive an expected $100-per-student increase.

How the Gap Was Closed

The budget closes a shortfall through a combination of reserves, transfers, and debt. The $880 million rainy day withdrawal is to be replenished in 2029 by sweeping reserves from an overfunded police and firefighter pension fund. An additional $375 million was transferred from the Public Works Assistance Account, which provides low-interest loans to local governments for infrastructure. Universities and community colleges were protected from direct cuts through a $240 million transfer from the capital budget into operating accounts, with the construction funding replaced by bonds.

What Comes Next

Ferguson acknowledged the budget is a bridge, not a solution. Revenue growth is not keeping pace with spending demands — driven largely by increased Medicaid and food stamp costs tied to federal program changes, and $1 billion in additional appropriations for the state’s growing legal liability from government misconduct lawsuits. The income tax signed two days earlier on households earning above $1 million will not produce revenue until 2029. Ferguson and the Legislature will face an $878 million structural deficit when the next two-year budget cycle begins.