State of the State 2026

January 13, 2026

Mr. President.

Madam Speaker.

Tribal Leaders.

Distinguished guests.

And my fellow Washingtonians,

I'm excited to announce that under the new Ferguson Administration, for the first time in State history, the Seattle Mariners AND Seattle Seahawks won their divisions in the same year.

That can't be a coincidence.

And we know that our work in professional sports is not done until we bring the Seattle Super Sonics back home.

Great teams - in sports and politics - are built on foundations of strong leadership. The first time I set foot in the Governor's Office was after I was elected Attorney General and Governor Gregoire invited me to visit for a conversation.

As the only other Washingtonian to serve as both Attorney General and Governor, she has been a mentor to me for a long time.

Governor Gregoire is with us today. Please join me in welcoming her back to the Capitol.

Last year, I attended the inauguration for the President at Heritage University in Toppenish, where we had the pleasure of listening to the Wapato High School Choir.

You can see why I was inspired to ask them to perform today. Let's thank them and Director Aaron Nix for their beautiful rendition of our National Anthem.

And if Pastor Gemmer seemed somehow familiar to you, that might be because she is the sister of my Legislative Affairs Director Debbie Driver. Please thank Pastor Gemmer for her invocation.

When I was a student at the University of Washington, I was fortunate to develop a group of friends who, four decades later, remain close. You just heard from one of those friends - our Poet Laureate.

For that crew of college buddies, I'm not sure if they are more surprised that Derek Sheffield became Washington's Poet Laureate or that I became Governor, but it is certainly a happy coincidence that we hold those positions at the same time.

Please thank Derek for reading his beautiful poem.

And just to be clear, Derek was nominated for this position after a lengthy process BEFORE I became Governor…

Also here today is my wife Colleen. Colleen comes from a family of hard workers. Her father, who died far too young, was a bricklayer and a leader in his union.

As high school students, Colleen and her sister worked at a metals plant, where their dad was employed. Colleen did a variety of jobs there, including learning how to use a jackhammer.

Colleen was the first member of her family to graduate from college, and earned her Master's degree at the UW.

Like many Washingtonians, she's a working mom who does a great job juggling multiple obligations.

She is very passionate about her international education work with students in our state's outstanding community college system.

And, as you might imagine, my election as Governor brings with it some rather significant changes for Colleen and our family, but Colleen handles those changes, and guides our children with grace.

Please join me in welcoming the First Lady of Washington State, Colleen Ferguson.

Speaking of our twins, Jack and Katie are happy to play hooky from school today, and they will be heading off to college in the fall.

Katie will pursue her education in the Midwest where she will play collegiate fastpitch softball.

And using my prerogative as Governor, and proud softball dad, I note for the historical record that two days ago Katie pitched her team to victory AND went 2 for 3 at the plate.

Jack is still deciding where he's going to college, but he already has exciting options and I know he'll choose a school that fits his talents and interests.

Jack has, ever since he was a young boy, always had a deep interest in history. And, as he worked the past few months on his many, MANY college applications, I was not surprised that Jack identified history as a likely major.

So I've been thinking about history lately - sometimes good history.

Sometimes challenging history.

It seems to me that history works in different ways. And historic events for a state come in two forms -

historical events that happen TO us.

And the history that we create.

Last month, history came to us in the form of historic flooding that caused tremendous damage and hardship to thousands of Washingtonians.

After devastating flooding in 2007, Governor Gregoire said: "I am reminded time and time again of the tremendous heart and spirit of Washingtonians."

That heart and spirit? I've seen it first-hand.

I saw it in Sumas and Concrete and many other towns where I had the privilege of meeting with Washingtonians and hearing their stories.

I visited a bar and grill in Hamilton, and had a conversation with the owner, Theresa, as she showed me around.

The damage was devastating

Yet, Theresa remained optimistic, and is determined to keep going, after she strips the building down to the studs and rebuilds.

I told Theresa that after she reopens, I will stop by for a visit - and a beverage or two.

I hope you'll join me. I'll send you all an invitation so we can celebrate what Theresa, and so many Washingtonians, have overcome.

I also met mayors and councilmembers of those towns, like Skykomish Mayor Henry Sladek, who demonstrated true leadership even as they faced personal hardships from the flooding.

There are many images that left us shaking our heads at the power of nature.

One of the most jarring was the video of an entire home being swept away by the Nooksack River.

That home belonged to Mike Khazak and Sarah Hansenand symbolized the scope and devastation of this disaster.

Mike said "That place was my life savings. That place was everything."

Mike and Sarah have a long road ahead of them, but they are deeply appreciative of the many Washingtonians they don't even know who reached out and offered to help.

Mike and Sarah are here today, representing many Washingtonians who lost so much.

Please join me in showing our support for them during this difficult period.

Many Washingtonians found themselves in life threatening situations, in the dark of night at a home suddenly filling with water, or in a car trapped by a freezing, fast moving river.

First responders, including our National Guard, risked their lives to help fellow Washingtonians.

The U.S. Army Corps of Engineers worked closely with our National Guard and others to protect our levies and the communities around them.

The historic floods also dealt a devastating blow to our infrastructure.

But our Washington State Department of Transportation crews answered the call.

From Yakima to Enumclaw, state employees and partners worked under challenging conditions and cleared 97 roads in just four weeks.

One of those roads is Highway Two, a critical artery that connects our state.

Thanks to the crews who labored 24 hours a day, Highway Two is now open, with no lane restrictions and just one detour.

Joining us today are:

Transportation Secretary Julie Meredith,

WSDOT Maintenance Superintendent Joe Munoz,

Major Nathan Fry and Sergeant Wyatt Berg of the National Guard.

U.S. Army Corps of Engineers Seattle District Commander Colonel Kathryn Sanborn.

And Skykomish Mayor Henry Sladek.

Please thank them, and all state workers, for their service.

I'm proud of the way we've come together to meet this historic moment.

Local leaders and community members told me that their state government showed up - that they often did not even need to seek support because someone from the state was already reaching out and offering assistance.

Government gets its share of criticism. But it's only fair to stop and notice when government delivers, especially under the most challenging and stressful circumstances.

We were not passive observers of a historic event.

Quite the opposite.

When the story of this historic flood is written, it will recognize that when history paid us an unexpected visit in December of 2025, the people and this state stepped up, and faced the challenge head on.

It's that heart and spirit of our people that allows me to report today that the state of our state remains strong.

We have the 9th largest economy in the nation.

We have a Triple A bond rating.

We dominate in space industry manufacturing.

Washington is building the world's first commercial fusion power plantin Chelan County.

The University of Washington, Fred Hutch, and the Allen Institute are part of a globally recognized ecosystem working on next-generation drug discovery and treatments.

Several of you joined me for the launch of the Cascadia Sustainable Aviation Acceleratorin Snohomish County, an opportunity for our state to once again set an example, and set the pace, for clean energy investment.

We had the largest increase in the country in requests to form new businesses. Washington's business applications grew 16.2%, while nationwide, applications dropped by nearly 5%.

And guess what? People continue to move to Washington State.

According to U-Haul rankings that just came out, Washington ranks sixth for gaining one-way movers- in other words, our state continues to grow.

And soon the world will be coming here for the biggest sporting event of all - the FIFA World Cup.

These are just a few of the reasons why the state of our state is strong.

But I am clear-eyed about the areas where we must do better.

And my first proposed budgetis laser focused on those improvements.

To keep our growth going, let's get back to basics,

invest in our infrastructure,

make our tax system more fair,

and continue our progress on addressing the housing crisis.

In the next two months, let's create history - to make the state of our state even stronger.

Our transportation infrastructure is in dire need of investment.

You know it.

I know it.

And, trust me on this, the people of our State know it.

We have 80 bridges in "poor" condition which means, and I quote, "advanced deficiencies such as section loss, deterioration, or seriously affected structural components."

That's why I propose historic investmentsto take care of our bridges - more than a billion dollars - without raising taxes.

Our infrastructure challenges include roads as well.

We rank first in the country for potholes, and that's not the kind of "first" we want.

This matters to Washingtonians. The average cost for pothole-related repairs on a car is $400.

My budget invests $164 million dollars to pave hundreds of miles this summer.

Over ten years, I propose investing $756 million to pave even more.

And, again, it does not raise taxes.

These critical investments are good for jobs, good for our economy, and will keep Washington moving.

In short, my proposal constitutes the largest investment in maintenance and preservation in over two decades.

Let's make THAT history together.

And there is one more piece of our core transportation infrastructure that needs investment - our iconic ferries.

Thanks to the leadership of Steve Nevey, we returned to full domestic service for the first time since 2019.

We went from 600 cancellations in the summer of 2024 to just 191 last summer.

But Steve and I keep emphasizing that this significant progress is fragile because of an aging fleet.

We have 11 vessels over 40 years old, including one that's 67!

Yes, Jack and Katie, that ferry is even older than me …

Just last week, we had three ferries go out of service unexpectedly.

You know what that means - reduced ferry schedules and hardship for Washingtonians who depend on that service.

That's why I am proposing an additional billion dollarsto build three more ferries and continue our work to replace an aging fleet.

Another challenge we face is the housing crisis.

We did good work on this issue last session.

Let's build on that momentum - literally.

My proposed budget, here's that word again, makes a historic investment - $244 million dollars - the largest-ever supplemental budget investment in housing.

With those dollars we will build and protect thousands of affordable housing units,

make it easier for first-time home buyers to enter the market,

and accelerate the process to build housing.

We must continue to be bold, and make historic investments in housing - both in policy and in dollars.

So I am confident we are well positioned to address internal challenges and meet the moment with unity and clarity.

But we cannot ignore the external challenges that create division and costs to our state, our families and our communities.

We need to be direct about what is happening in our country and our state with ICE.

It's horrific, it's unjust, and it needs to stop -now.

As an American, I never thought I would see federal agents in masks jumping out of unmarked cars and grabbing people off our streets.

This conduct will undoubtedly be remembered as a shameful period in our nation's history.

Senator Valdez has a bill that prohibits law enforcement from wearing masksand requires identifying information to be clearly displayed on their uniform.

Let's get that legislation to my desk immediately so I can sign it into law.

Speaking of challenges with the federal government, the Centers for Disease Control has seen an exodus of scientific experts and alarming shifts in policy that place Washingtonians' health at risk.

I immediately took action and teamed up with other Governors to form the West Coast Health Alliance.

The Alliance ensures Washingtonians will continue to receive responsible recommendations from health experts who rely on, you guessed it, science.

But we are not stopping there.

I'm proud to partner with Insurance Commissioner Kuderer and a bipartisan group of legislators,

Senator Cleveland,

Representative Bronoske and

Senator Harris to shift vaccine recommendations away from science-denying federal committeesand place it with our own Washington State Department of Health, which will be guided by - you guessed it again - science.

In addition to these challenges, we are facing an affordability crisis affecting Washingtonians across our state.

Our regressive, upside-down tax code, does not help.

Our system takes too much in taxes from hardworking families and not enough from the wealthy.

Washington families whose income is in the bottom 20% pay a whopping 13.8% of their total income in taxes, while those whose income is in the top 1% pay only 4.1% of their income.

That's not fair.

That's not right.

And that's why I'm calling for something truly historic - a Millionaires' Tax.

I want to be clear that when I use the term "millionaire," I mean someone who makes more than a million dollars in income in a single year.

That does not include assets like the value of your home.

Less than one half of one percent of Washingtonians will pay it.

Now let's talk about what happens to the revenue from this Millionaires' Tax.

Bottom line - we must take a significant percentage of these dollars and put them back in the pockets of Washingtonians.

Let me give you two examples.

Some of those gains must be used to expand eligibility for - and increase the amount of - the Working Families Tax Credit.

Under this program, the state sends a check each year to working families.

That's a great start - but we can do even better.

We must expand this program so that more people are eligible, and increase it so Washingtonians get more money back in their pockets.

Second, we must also use a significant portion of the revenue to lower taxes on small business owners.

Small businesses are the backbone of our economy. They create jobs and build community.

I want them to keep more of their hard-earned money - they should not have to pay B&O taxes until they gross more than $1 million in revenue.

For example, if you own a business and you gross $800,000 annually, you have a ton of expenses and currently pay about $4,000 in B&O tax.

THAT small business owner should pay nothing.

This approach creates the biggest tax break for small business owners in state history.

We should also use the gains from a Millionaires' Tax to put more money into K-12 schools and bolster Washington students' access to a world-class education.

So let's seize this opportunity, this session, to make our tax system more fair.

And speaking of making life more affordable, my budget has specific ideas to help Washingtonians.

A one-time $200 household utility bill credit for 125,000 families.

$33 million to expand the State Home Energy Assistance Program, which provides utility bill assistance to thousands of households.

And here's another historic milestone - thanks to the generosity of the Ballmer Group, the state will receive upwards of a billion dollars to invest in free early learning programs that help kids and hardworking families.

I'm proud to partner with Senator Claire Wilson and Representative Steve Bergquist on a bill that allows us to utilize the incredible giftfrom the Ballmer Group to pay for up to 10,000 additional spots for our kids.
With these actions, and others, we can make this short session long on affordability - and make a real difference for Washingtonians.

In my inaugural address last year, I highlighted specific proposals from both Democratic and Republican legislators that should be passed by this body.

And we had an excellent success rate - half of those proposals became law.

Those bills improved public safety, ensured farmers receive the rebatespromised under the Climate Commitment Act, prevented the National Guard in other states from being sent into our Washington statewithout our permission and helped protect children in crisis.

Given that success, let's do it again right now.

Senators Noble and Wagoner, Representatives Leavitt and Penner - as the son and grandson of veterans, I support your effort to expand eligibility for free early learning programs to military families. I Look forward to working with you on that.

Representatives Manjarrez and Peterson, thank you for House Bill 2151which will create more affordable housing by making it easier for pre-made modular housing to meet building standards.

I look forward to signing it.

Senators Muzzall and Lovick - I share your interest in making our roads safer by expanding the definition of reckless driving. Let me know how I can help get that legislation to my desk for signature.

Representatives Low and Reed are working together to allow the Traffic Safety Commission better access to health and medical informationwhen reviewing fatal crashes. Uncovering the cause of these crashes helps with prevention and provides closure for Washingtonians who lost their loved ones.

Representatives Dent and Springer - I appreciate your bipartisan work on House Bill 2104, which ensures that local fire departments have access to air resources to fight wildland fires.

I look forward to working with all of you over the next 60 days on these and other ideas to get good policy to the finish line.

Last year, I said "our mission must be to speed up government" and cut down permit and license processing times.

If we are late delivering a permit or a license, that's a hardship for that Washingtonian.

So I signed an Executive Order to improve our response times.

And we're getting results.

The Department of Health reduced processing time for behavioral health licenses from four months to just six weeks.

The Department of Licensing cut the processing time for security guards from 46 days to 30 days

They've also cut the processing time for cosmetologists from 40 days to 30 days.

And we are just getting warmed up.

My Executive Order requires agencies that don't meet deadlines to refund the application fee.

That's fair.

But we have a problem.

Some agencies do not have the legal authority to provide refunds.

Thankfully, Representative Richards and Senator Krishnadasan have a bill to put this refund policy into state law. Let's make government more responsive to the people by supporting that proposal.

One final issue - and a challenge to each of you.

Washington is one of the most generous states in helping young people attend college and apprenticeships.

Nearly half of Washington households qualify to receive this financial aid and many are eligible to have full tuition covered at our public universities.

But there's a catch - In order to unlock this assistance, that family must complete the Free Application for Federal Student Aid - or FAFSA.

Which brings us to the challenge.

We rank 47^th for families completing the FAFSA.

Improving our response rate is something all of us support.

I recently signed an Executive Order establishing the "Washington Completes FAFSA" campaign.

That order establishes an advisory board to guide our efforts in increasing completion rates.

Teenagers get their information in ways that adults like us don't always understand. That's why our advisory group includes students to help us reach their peers.

Sienna Jarrard and Collin Bannister are two of those students and they are here today. Sienna and Collin, please stand and be recognized for your efforts.

So here's my challenge to you:

Join me in this effort. My team will be following up with information about the program and ways you can help.

For example, would you consider going to your high schools to promote this wonderful opportunity? Let me know and I will try to join you.

Positioning Washington for an even stronger future is why we are all here - serving our constituents and doing this important work.

It's why we take our roles seriously, debate, and advocate for policies that we believe in.

Let's give inspiration to future generations that we took up the challenge and provided a foundation for success.

Washingtonians are not mere bystanders to history.

We are bold and, with heart and spirit, we forge our destiny and make history.

Thank you for joining me in serving the people of Washington state.