by Jake Goldstein-Street, Washington State Standard
July 21, 2026
Washington’s runaway payouts for government misconduct climbed to $537 million in the past year, as the ever-growing sum continues to strain the state’s finances.
That tally from the fiscal year that ended June 30 is an all-time high, up from roughly $500 million the previous year and five times what Washington shelled out in 2021.
The increasing total from settlements and jury verdicts show the extent to which the state is being held accountable for sometimes decades-old mistakes and negligence that left children with abusive parents and allowed incarcerated residents to die in prison and employees to be discriminated against.
As a bandage for the problem, the Legislature approved $1 billion earlier this year to shore up the state self-insurance fund temporarily.
A new panel is tasked with proposing systemic changes to stem the flow of claims and resulting multimillion-dollar payouts kneecapping the state.
“We’ll continue to try to put some curbs” up to limit these costs, said Sen. June Robinson, D-Everett, who is her chamber’s lead budget writer. “Until we do, and that actually takes effect, we’re going to continue to have these.”
The latest total of $537 million accounts for payments from July 1 of last year to June 30. The state Department of Children, Youth and Families makes up most of the costs, about $388 million, according to the Department of Enterprise Services.
As the cases stack up, so do the legal fees. The state spent $32.7 million on lawyers and staff in the attorney general’s office plus $43.6 million on outside law firms for a total of more than $76 million, according to preliminary figures. That’s up from nearly $58 million total the year prior.
The state’s self-insurance fund was $1.7 billion in the red last month.
This led K.D. Chapman-See, the director of the state’s Office of Financial Management, to authorize the fund to operate with a “temporary cash deficiency” until the $1 billion from the Legislature, premiums from state agencies and a transfer of tens of millions of federal dollars were received. Officials say this deficit has more to do with the timing of moving money around than increasing strain. The account is slated to be in better shape with the major new state funding.
What to do about it
A new state committee will recommend changes to the current civil legal system. Its members include personal injury attorneys, victim advocates and representatives of state and local government. It’s meeting again next week. The group, which the state is spending $50,000 on, is tasked with delivering a report Nov. 1 with ideas.
The issue is hamstringing finances not just for the state, but cities, counties and school districts, as well.
For example, county claims are rising rapidly and liability insurance premiums are up over 380% since 2021, according to a recent Washington State Association of Counties report. These added costs either lead to higher taxes or reduced public services. The association cited capping monetary damages as an option, but that would likely require a constitutional amendment.
A spokesperson for Gov. Bob Ferguson said he looks forward to the committee’s recommendations.
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State leaders have floated ideas to help address the issue. One from Ferguson would have set up an administrative panel to specifically handle years-old cases against the state Department of Children, Youth and Families, which oversees the child welfare system and juvenile detention.
Finding the balance of providing financial stability for governments while providing fair justice to victims has been tricky.
Lawmakers this year proposed requiring arbitration for civil cases against governments, leaving the outcome to a neutral third-party in hopes of speeding up cases. Ohio has a model somewhat similar to this called the Court of Claims. But the bill was watered down in the legislative process and stalled in the face of staunch opposition from trial lawyers who bring these cases.
Robinson thinks the idea of addressing the ballooning payouts is gaining momentum.
Ferguson has said this growing liability is on the shortlist of major budget problems the state faces. He’ll be proposing his first two-year spending plan later this year for lawmakers to consider when they return to Olympia in January. Ferguson has vowed not to propose more tax increases, and has pushed state agencies to find more to cut to save money.
Reporter Jerry Cornfield contributed to this report.
Washington State Standard is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Washington State Standard maintains editorial independence. Contact Editor Bill Lucia for questions: [email protected].