Thursday, October 1, 2026
WENATCHEE — Washington remains one of the most financially stable states in the country, but State Treasurer Mike Pellicciotti says that strength is about to be tested.
For the second year in a row, U.S. News & World Report has ranked Washington No. 1 in the nation for long-term fiscal stability. Moody’s recently reaffirmed the state’s triple-A credit rating. And yet, Pellicciotti says, the financial pressure created by federally-imposed tariffs is already softening the state’s outlook.
“For this year, for the first time in history, Washington State’s credit ratings are stronger than the federal government’s,” Pellicciotti said during a visit to Wenatchee in the first part of November. “But that’s why it’s going to take all that financial strength so that we can weather these challenges.”
He’s been traveling through eight or nine counties in the last few days — his third visit to the Wenatchee Valley in recent months — meeting with agricultural leaders, port officials, mayors and business owners. Nearly every conversation turns toward tariffs.
“Tariffs are having a negative impact on our economy,” he said. “I can’t sugarcoat it.”
A recent Office of Financial Management analysis projected as many as 33,000 jobs could be lost in Washington due to current federal trade policy.
“To give some context,” Pellicciotti said, “that is more people than attended the average game with the Mariners in T-Mobile Park this year.”
Because Washington is heavily dependent on sales tax, he added, anything that slows consumer spending or constrains export markets ultimately softens state revenues. Agricultural economies feel it first.
“Whenever you’re talking about the economy in central and eastern Washington, there is always a connection to agriculture,” Pellicciotti said. “We have one of the most diversified agricultural economies in the country, and that helps us weather normal fluctuations. But when you’re talking about tariffs across the board, there’s a negative impact to every sector — just to varying degrees.”
In the Wenatchee Valley, the impact also shows up in construction prices tied to Confluence Parkway materials, rising costs for orchard operations and farm suppliers, and delayed or costlier infrastructure work by utilities.
“You feel it first in small communities,” he said. “And then the ripple spreads statewide.”
In early November, Pellicciotti joined Gov. Bob Ferguson in submitting a legal argument to the U.S. Supreme Court urging it to invalidate what they call “unlawfully and recklessly imposed tariffs.” Two federal courts have already agreed with Washington’s legal position.
“We’ve done everything within our power to try to change course before more irreparable harm is done to farmers and small businesses,” he said.
Pellicciotti’s focus on agricultural regions is shaped by more than travel. Before attending law school at Gonzaga, he earned a master’s degree in rural economic development, a detail he says is easily overlooked.
“I don’t think we can talk about our economy unless we talk about our agricultural economy and other aspects of the economy in central and eastern Washington,” he said. “And many of those sectors are growing along with the population.”
He’s visited all 39 counties — “often more than once,” he notes — and sees a consistent pattern across the state: workers driving 30 to 40 minutes to jobs in towns where housing has become unreachable, and workers in those towns driving similar distances somewhere else.
“I always thought at some point it would go full circle,” he said. “I never have found a place where it overlaps.”
That, he said, affects everything from transit to labor shortages, especially in tourism-heavy areas like Leavenworth.
One tool Pellicciotti repeatedly raises with local governments is the Treasurer’s LOCAL program (Local Option Capital Asset Lending), which allows small communities to borrow for needed equipment at lower rates by pooling projects statewide.
“If they were financing it themselves, it would be very expensive because they wouldn’t have the credit rating to get a good rate,” he said. “A big focus of mine is to get more money back to the people.”
He points to Winlock, Washington as an example. Through the LOCAL program, the town financed a new fire truck and ambulance. The savings then allowed them to purchase a used ladder truck from Auburn Valley — a piece of equipment that dramatically expanded the town’s ability to protect denser downtown buildings.
“When you do these financing things well, it usually means more bang for the buck,” he said. “More fire trucks, more ambulances, more capacity to meet the unique needs of a community.”
Pellicciotti said communities like Cashmere — now discussing whether taller downtown buildings require ladder-truck investments — are exactly the places he hopes to reach more often.
“As a statewide elected official, it’s incumbent on me to come to you because you’re just as much a constituent as anyone else,” he said.
Beyond tariffs, Pellicciotti is watching national economic volatility closely, especially as a member of the State Investment Board. While he speaks only for himself on that board, he says he has consistently urged a reduction in exposure to private equity and an increase in safer fixed-income investments.
“If we’ve succeeded in having one of the best-funded pensions in the country, now is the time to reduce the risk to ensure long-term sustainability,” he said.
He is more direct about the pool he does control: The $35 billion managed by the Treasurer’s Office for state and local governments.
“Compared to four years ago, our returns are about thirty times what they were,” Pellicciotti said. “That means an extra $3 million more a day going to local governments. Even for smaller communities, it’s incredibly impactful.”
Two out of three millennials have zero retirement savings, Pellicciotti said, and the numbers are worse for Gen Z. To address that gap, his office proposed — and lawmakers passed — Washington Saves, an automatic IRA program for workers whose employers offer no retirement plan. The program is being implemented now and will launch in 2027.
“If you’re not currently provided a retirement option at work, the employer simply has to bring Washington Saves to your attention and deposit funds into it,” he said. “Those funds belong to the employee. They can opt out, but the money is theirs and it travels with them.”
Other states with similar systems have seen the greatest benefits among lower-income workers.
“Removing that daily financial stress improves people’s health outcomes,” he said. “It gives them more confidence about their future.”
He calls it part of a broader philosophy: “Folks should have economic opportunity at birth, the tools to economically thrive throughout their career, and the dignity of retirement security later in life.”
Pellicciotti says small businesses — especially those in agricultural and rural regions — are bearing the brunt of federal trade policy.
“Small businesses can’t restructure supply chains on the fly or send a lobbyist to D.C. to get them off the next tariff list,” he said. “People are getting squeezed on many fronts.”
That, he says, is why he joined Gov. Ferguson in challenging the tariffs before the Supreme Court.
“We’re trying to provide a reprieve not only to small business owners, but to average Washingtonians paying more in cost of living just to get by.”
Andrew Simpson: 509-433-7626 or andrew@ward.media
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