Washington State’s 2025 legislative session brought major changes to the budget and tax landscape. The Washington Research Council (WRC) has published several insightful articles that break down the implications of these changes for businesses, consumers, and the state’s fiscal future. Below is a summary of each article, with a link for further reading.

1. Budget Cuts Offset by New Spending
While the Washington Legislature made $7.020 billion in cuts to the operating budget over five years, these reductions were largely offset by significant new spending on other programs. The analysis highlights that budget shifts do not necessarily reduce overall government spending but rather reallocate resources to new or expanded initiatives. This reflects a prioritization of funding rather than an actual contraction of government operations, raising questions about the long-term sustainability of the state’s fiscal policies.
Read the full article →

2. Historic Tax Increase and B&O Rate Changes
This Washington Research Council article outlines the scope and impact of the largest tax increase in Washington State’s history, adopted during the 2025 legislative session. The tax package includes substantial increases in Business and Occupation (B&O) tax rates, particularly targeting service industries and high-revenue firms. The Council details how different business sectors will be affected, emphasizing that changes could increase the cost of doing business across the state. This article also raises concerns about the economic impact of these tax hikes on competitiveness and investment in Washington.
Read the full article →

3. Revenue Impacts of B&O Tax Bill
A closer look at the revenue implications of the new B&O tax provisions reveals detailed estimates of the additional revenue the state expects to collect. It breaks down how each provision, including rate increases, surcharges, and new classifications, contributes to the overall projected revenue gain of over $2.7 billion in the first four years. The report emphasizes that a large share of revenue comes from service-related businesses and high-grossing firms, and it raises concerns about potential volatility and economic burden, especially for sectors sensitive to narrow margins.
Read the full article →

​4. Conference Budget Boosts Appropriations and Revenues
The final conference budget report proposes an 8.2% increase in Near General Fund–State (NGFO) appropriations and includes a tax package expected to raise $9.4 billion over four years. The analysis highlights how the budget significantly expands state spending, driven by both increased tax collection and program growth. The Council notes that the budget relies heavily on new taxes and fees, raising concerns about the long-term fiscal outlook and sustainability of this elevated spending trajectory.
Read the full article →

5. Impact of Higher B&O Taxes on Consumers
This article from the Washington Research Council explains that while a Business and Occupation (B&O) tax is levied on businesses, the economic burden often shifts to consumers through higher prices. The analysis emphasizes that businesses typically pass tax increases along the supply chain, especially in competitive markets where margins are tight. The Council warns that the recent B&O tax hikes adopted by the legislature are likely to raise the cost of goods and services for Washington residents, disproportionately affecting low- and middle-income households.
Read the full article →

Each article provides a valuable context for understanding how these fiscal decisions may ripple through Washington’s economy. Whether you’re a policymaker, business owner, or just a curious resident, staying informed on these developments is crucial.

​Washington State’s 2025 legislative session brought major changes to housing law, with a focus on affordability, tenant protection, and housing development. These new laws are intended to address the state’s growing housing crisis, but also bring about significant adjustments for property owners. Whether you rent out a single unit or manage a portfolio of properties, understanding these laws is key to adapting your operations and staying compliant. 

House Bill 1217: Rent Control Statewide

House Bill 1217 is one of the most talked about measures in this session. It establishes statewide rent stabilization rules, limiting how much landlords can raise rent each year. Specifically, annual rent increases are capped at 7% plus inflation or at 10%, whichever is lower. This law marks the first time Washington has implemented a broad rent control policy, signaling a shift in how the state balances market forces and tenant protection. 

For renters, this implies more predictable housing costs and a lower risk of sudden displacement. However, for landlords, the cap may impact long-term financial planning, particularly in regions where costs such as property taxes, insurance, and maintenance are rising faster than the allowable rent increases. Owners need to assess how these limits affect revenue models and consider strategies for controlling expenses.

House Bill 1491: Increasing Density Near Transit

Another major policy change came through House Bill 1491, which requires cities to allow higher-density housing near transit corridors. The law mandates upzoning around areas served by frequent public transit, such as light-rail stations and major bus lines. The goal is to create walkable, transit-connected communities while increasing housing supply in areas with strong infrastructure. 

Renters may benefit from more housing options near their jobs, schools, and public services. Property owners located in these areas could see new development opportunities with the ability to build more units than previously allowed. However, participating in such development will likely require familiarity with new permitting processes and compliance with the updated local planning codes.
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House Bill 1096: Easier Lot Splitting for Small-Scale Housing

House Bill 1096 focuses on increasing the housing supply by making it easier for property owners to split large residential lots into smaller parcels. This legislation opens the door for more “missing middle” housing, such as duplexes, triplexes, and accessory dwelling units, especially in traditional single-family neighborhoods. 

This could be a win for renters who are seeking more affordable or flexible living options. For property owners, the law creates opportunities to build and generate income from additional units on existing lots. That said, owners will need to navigate zoning, permitting, and infrastructure requirements, which could vary by jurisdiction and require upfront investment.

House Bill 1177: Housing Support for At-Risk Families

Finally, House Bill 1177 expanded the housing support for families involved in the child welfare system. This enhances funding and eligibility for housing assistance programs aimed at preventing family separation due to homelessness or unsafe housing conditions. The bill ensures that families at risk of entering the child welfare system receive rental assistance and case management support. 

This law provides a vital safety net for renters, particularly vulnerable families. Landlords may see more tenants using state-supported housing programs that can provide more reliable rent payments through vouchers. However, they must also comply with program requirements, including lease terms and property condition standards.

In summary, Washington’s 2025 housing laws reshape the relationship between renters and property owners. The new rules emphasize stability and access for tenants while encouraging denser housing development in the targeted areas. Property owners who remain informed and proactive—whether by adjusting rental strategies, exploring new development potential, or engaging with housing programs—will be best positioned to navigate these changes. As the market continues to evolve, successful landlords will adapt to new expectations while maintaining the long-term value of their properties.

Thank you to everyone who attended Business After Hours at Hampton Inn Richland on Thursday, May 8. We hope everyone made some fantastic new business connections. Our next Business After Hours will be on June 12 from 4 - 6 at Grace Clinic (​800 W Canal Dr, Kennewick, WA 99336).

​At our recent Regional Advocacy Round Table, local law enforcement leaders from the Pasco, Richland, and Kennewick Police Departments shared valuable insights with business owners on how to protect their property, employees, and customers. Public safety continues to be a top concern for our business community, and officers emphasized several practical steps businesses can take to deter crime and support policing efforts.

Lighting is one of the most important and easy-to-implement safety measures. Proper lighting around your business, especially around entrances, exits, and parking areas, can discourage criminal activity and make it easier to spot suspicious behavior. Criminals tend to avoid well-lit areas because they are more likely to be seen.

Surveillance cameras are another effective tool. Not only do cameras deter theft and vandalism, but police can also use video footage to identify suspects and gather evidence. Even basic security camera systems can make a big difference and are becoming more affordable for small businesses.

Another key takeaway always calls 911 when something happens, regardless of how small the issue is. Whether it is vandalism, suspicious behavior, or minor theft, reporting incidents helps law enforcement see where problems occur. Police departments use this information to track patterns and focus resources using a method called “Hotspot Policing,” which targets areas with higher levels of reported crime.

Business owners also learned about their rights when it comes to trespassing. No one has the right to hang out on or use private property without permission. You can ask someone to leave, and if they do not, police can legally remove them. Better yet, most local departments offer a “Pre-Authorized Trespass” form. By signing this, you give police permission to remove trespassers from your property after hours, without needing to call you first.

Finally, several police departments offer free business safety audits. Officers can visit your location, assess your current safety measures, and suggest ways to improve your physical security. These audits help tailor safety strategies to a business’s specific needs and location.

Maintaining the safety of our business community requires teamwork. By taking small but smart steps—and working closely with local law enforcement—we can all help make our cities safer places to live, work, and shop.

We are now accepting speaker proposals for the Washington Workplace Summit, taking place on Tuesday, July 22, 2025, from 8:30 a.m. - 1:30 p.m. at the Three Rivers Convention Center in Kennewick.

This dynamic half-day event is designed to empower professionals with cutting-edge workplace best practices. Whether you're looking to enhance your skills or transform your organization's culture, this summit offers invaluable insights and networking opportunities. 

If you have a message, experience, or strategy to share that can inspire and equip our attendees, we invite you to apply.

• Provide an outline, including title and description of your presentation
• Include your bio and links to any videos you may have representing prior public speaking experiences
• Attach a high-quality, professional head shot
• Breakout session speakers and panelists receive one complimentary pass to the conference and luncheon in lieu of compensation

Questions? Email Ricki Sosebee, Event Director, at [email protected] or call 509.491.3230.

Congratulations to Pahlisch Homes on the ribbon cutting for their new model home at Westcliffe Heights. You can visit the beautiful new house at 389 Ascend Ave. in Richland.

​Last week, a delegation of nine members from our Ag Innovation Center Council traveled to Woodland and Davis, California, to learn from the region’s leading agri-food innovation ecosystem. The group visited AgStart and the University of California, Davis, where they met with key partners including John Selep of AgStart, Lon Hatamiya of the VINE Institute, Troels Adrian of the Greater Sacramento Economic Council, Kara Leong of iCAMP, Gabe Youtsey of UC Agriculture and Natural Resources, and Karl Jessen of UC Davis Venture Catalyst. These leaders shared how industry, academia, and government collaborate to support agriculture, food, and health entrepreneurs through mentorship, education, incubator space, and strategic connections.
 
Tri-Cities Delegation
Adam Lincoln, Port of Pasco
Chad Kruger, WSU, Center for Sustaining Agriculture & Natural Resources
Diahann Howard, Port of Benton
Lori Mattson, Tri-City Regional Chamber of Commerce                                   
Matt Murphy, Tri-City Regional Chamber of Commerce                                   
Michelle Holt, Benton Franklin Council of Governments
Phil Ohl, Tri-Cities Angel Alliance
Robert Bauman, WSU Tri-Cities
Sam Chavoshi, AGNEMA, LLC 

Congratulations to the Clearwater Lofts on their ribbon cutting on Friday, May 2! Check out the beautiful apartments at 7275 W. Clearwater in Kennewick.

Congratulations to Parkview Estates Senior Living Community on the ribbon cutting and open house for their new remodel! You can visit their beautifully renovated facility at 7820 W. 6th Avenue in Kennewick, right by Hansen Park.