(The Center Square) – The Washington State Office of Financial Management has released cost estimates for the two recently approved Washington Public Employee Association contracts for fiscal year 2026: one for General Government employees and one for Higher Education employees.
The new one-year contracts, overwhelmingly ratified by WPEA members last month, secured retroactive pay increases that members had missed out on in 2024 and earlier in 2025.
The cost estimates for the WPEA agreements for the 2025-27 biennium are $22.6 million for General Government employees and $13.6 million for Higher Education employees.
Thousands of state government and community college employees did not get July raises due to the state budget being signed without allocating funds for these contracts. WPEA did not approve the two contracts in time for the 2025-27 state budget, as union members had overwhelmingly voted down the state’s initial offer in September 2024.
By law, public sector unions in Washington must approve a new contract by Oct. 1 to be considered by the governor for funding in the ensuing two-year budget.
According to OFM, when the previous tentative agreements were forwarded to the Legislature in March, the cost estimates were $33.6 million for General Government employees and $22.3 million for Higher Education employees.
The Center Square asked OFM why the more recent cost estimates were significantly lower than the cost estimates for the tentative agreements that went to the Legislature in March.
“The main reason [for] the drop in cost estimates is these don’t include health care benefits that were already funded as part of the wider health care coalition during the 2025 legislative session,” OFM Deputy Communications Director Hayden Mackley said in an email.
“Union-represented employees receive health care benefits based on an agreement of the coalition of unions [that] bargain for health care benefits, and that’s not dependent on individual collective bargaining agreements being ratified or funded. This accounts for $10.5M of the difference for WPEA General Government, and $8.4M for WPEA Higher Education. Those health care costs were funded in the 25-27 budget, so [are] not included here.”
She added, “The rest of the difference is due to a decrease in employer pension rates between July 2024 (7.4%, used in the Oct 2024 submittal) and July 2025 (5.58%, used in Oct 2025 submittal.) This is offset slightly by a minor increase in employer contribution rates for Paid Family and Medical Leave.”
The question now is whether state lawmakers and Gov. Bob Ferguson will fund the agreements in the 2026 supplemental budget they will work on during the next legislative session.
The Center Square reached out to the office of state Rep. Timm Ormbsy, D-Spokane, chair of the House Appropriations Committee, about the the odds that the agreements will be funded next year.
“There’s no knowing,” Shannon Waechter, Ormsby’s legislative assistant, told The Center Square in a phone call. “There’s no clear understanding of funding at this point.”
Washington faces a significant budget gap for the upcoming biennium due to softening revenue projections and an increased demand for state services. The state Legislature will need to address this during the 2026 legislative session with a supplemental budget.
If the two contracts are funded, they will take effect at the start of the next fiscal year on July 1, 2026.
