Funding Halted for WA Employee Ownership Program

Updated May 30, 2025. The author would like to thank Jack Moriarty of Lafayette Square Institute for his input.

Following speculation and legislative hearings featuring testimony from interested parties, the state of Washington has enacted changes to its employee ownership program. Signed into law on May 19 by Governor Bob Ferguson (D), HB 2047 will eliminate funding for the employee ownership program, initially launched in 2023, and will also sunset the associated tax credit for new applications after June 30, 2025.

While far from ideal, avoiding a full repeal represents a significant win for the employee ownership community. The original bill as introduced would have entirely eliminated the program. Thanks to grassroots engagement and an amendment from State Senator Bob Hasegawa (D), stakeholders were successful in keeping the program in the statute. It's also noteworthy that there was unanimous Senate Republican opposition to halting funding for the program, joined by a handful of Senate Democrats led by Senator Hasegawa.

The decision to halt funding was primarily the result of a challenging state budget environment rather than a reflection of a lack of support for employee ownership within the legislature. In fact, the floor debate reflected significant bipartisan appetite to revive funding for the program in the next budget cycle even among those who voted for the budget cut.

I was honored to testify on behalf of the employee ownership community on the benefits of employee ownership and, while saddened by the current funding pause, I'm encouraged by the preservation of the program itself and inspired by the bipartisan support for its future.