The bill aims to limit annual state spending growth to the rate of median worker wage growth, with any excess revenues allocated for property tax relief. It introduces a new section to chapter 43.135 RCW that establishes a state expenditure limit starting from the fiscal year beginning July 1, 2026. This limit will be calculated based on the previous fiscal year's expenditures, adjusted by an annual spending growth cap defined as the average median wage growth over the past ten years. Additionally, the state treasurer is prohibited from issuing checks that exceed this expenditure limit, and violations will incur penalties as outlined in existing law.

Furthermore, the bill includes provisions to address shifts in funding sources for state programs, requiring adjustments to the expenditure limit to reflect any such changes. It mandates the economic and revenue forecast council to calculate excess revenues annually, which will then be used to reduce property tax rates for the following year. The bill also amends RCW 84.55.010 to clarify how property tax levies are determined, ensuring that the highest amount of regular property taxes levied in recent years is calculated without considering reductions made under the new property tax relief provisions.

Statutes affected:
Original Bill: 84.55.010